Portfolio management for endowments and foundations is increasingly becoming more complex.
Understand your risk exposure and help enhance your investment results.
Endowments and foundations face a dual mandate: preserving and growing capital over the long term while meeting short-term liquidity needs to fund operations, grants or distributions. Most endowments and foundations are meant to last into perpetuity, requiring investment strategies that preserve and grow capital over the long term. The long-term return assumption generally has two goals:
Support the annual spending rate, and;
Preserve the purchasing power of the entity (net of fees).
The long-term time horizon of endowments and foundations allows them the opportunity to take on more risk in their asset allocations than other institutional investment portfolios, but they cannot afford to completely ignore market volatility. Striking a balance between the dual mandate may be difficult at times, especially in a volatile environment.
Discover more about asset allocation – balancing long-term return and short-term liquidity in our latest article,
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