Nonprofit Asset Management - Effective Investment Strategies and Oversight

Informationen zum Autor Matthew R. Rice, CFA, CAIA, is Chief Investment Officer and a Principal at DiMeo Schneider & Associates, LLC, a Chicago-based investment consulting firm that oversees more than $35 billion in institutional and high-net-worth investment assets. He is a coauthor of The Practical Guide to Managing Nonprofit Assets (Wiley).Robert A. Dimeo, CIMA, CFP, is the Managing Director and cofounder of DiMeo Schneider & Associates, LLC. He has been featured in prominent publications such as the Los Angeles Times, Crain's Chicago Business, and Pensions & Investments and is coauthor of numerous books, including The Practical Guide to Managing Nonprofit Assets (Wiley).Matthew P. Porter, CIMA, is Director of Research Analytics and a Principal at DiMeo Schneider & Associates, LLC. He has served as consultant to a number of nonprofit and corporate clients and is coauthor of The Practical Guide to Managing Nonprofit Assets (Wiley). Klappentext An authoritative guide for effective investment management and oversight of endowments, foundations and other nonprofit investorsNonprofit Asset Management is a timely guide for managing endowment, foundation, and other nonprofit assets. Taking you through each phase of the process to create an elegant and simple framework for the prudent oversight of assets, this book covers setting investment objectives; investment policy; asset allocation strategies; investment manager selection; alternative asset classes; and how to establish an effective oversight system to ensure the program stays on track.* Takes you through each phase of the process to create an elegant and simple framework for the prudent oversight of nonprofit assets* A practical guide for fiduciaries of endowment, foundation, and other nonprofit funds* Offers step-by-step guidance for the effective investment management of assetsCreated as a practical guide for fiduciaries of nonprofit funds--board members and internal business managers--Nonprofit Asset Management is a much-needed, step-by-step guide to the effective investment management of nonprofit assets. Zusammenfassung An authoritative guide for effective investment management and oversight of endowments, foundations and other nonprofit investorsNonprofit Asset Management is a timely guide for managing endowment, foundation, and other nonprofit assets. Taking you through each phase of the process to create an elegant and simple framework for the prudent oversight of assets, this book covers setting investment objectives; investment policy; asset allocation strategies; investment manager selection; alternative asset classes; and how to establish an effective oversight system to ensure the program stays on track.* Takes you through each phase of the process to create an elegant and simple framework for the prudent oversight of nonprofit assets* A practical guide for fiduciaries of endowment, foundation, and other nonprofit funds* Offers step-by-step guidance for the effective investment management of assetsCreated as a practical guide for fiduciaries of nonprofit funds--board members and internal business managers--Nonprofit Asset Management is a much-needed, step-by-step guide to the effective investment management of nonprofit assets. Inhaltsverzeichnis Preface xiAcknowledgments xvCHAPTER 1 The Three Levers and the Investment Policy 1The Three Levers 1Investment Policy Statement 5Statement of Purpose 6Statement of Objectives 6Liquidity Constraints 8Unique Constraints or Priorities 10Investment Strategy 11Duties and Responsibilities 14Investment Manager Evaluation 15Conclusion 16CHAPTER 2 Asset Allocation 17Modern Portfolio Theory 17Capital Market Assumptions: The Building Blocks of Portfolio Construction 20Shortcomings of Modern Portfolio Theory 20Probabilistic Optimization Models--The Frontier EngineerTM 24In the Long Run . . . 26Strategic, Tactical, and Integrated Asset Al...

List of contents

Preface xiAcknowledgments xvCHAPTER 1 The Three Levers and the Investment Policy 1The Three Levers 1Investment Policy Statement 5Statement of Purpose 6Statement of Objectives 6Liquidity Constraints 8Unique Constraints or Priorities 10Investment Strategy 11Duties and Responsibilities 14Investment Manager Evaluation 15Conclusion 16CHAPTER 2 Asset Allocation 17Modern Portfolio Theory 17Capital Market Assumptions: The Building Blocks of Portfolio Construction 20Shortcomings of Modern Portfolio Theory 20Probabilistic Optimization Models--The Frontier EngineerTM 24In the Long Run . . . 26Strategic, Tactical, and Integrated Asset Allocation Steering Mechanisms 27The Low Volatility Tailwind 29Tail Risk Hedging 31Counterparty Risk 33Portfolio Rebalancing 34Conclusion 38Notes 38CHAPTER 3 Traditional Global Financial Asset Classes 39Global Fixed-Income Asset Classes 39Global Equity Asset Classes 55Conclusion 59Notes 59CHAPTER 4 Traditional Asset Class Manager Selection 61Manager Search and Selection 61Investment Vehicles 67Active versus Passive Management 68When to Terminate a Manager 70Conclusion 72CHAPTER 5 Hedge Funds 73The Evolution of Hedge Funds 73Modern Hedge Fund Strategies 74Why Invest in Hedge Funds? 78Alpha-Beta Framework, Hedge Funds, and Fees 85Hedge Fund Indices and Benchmarks 87Hedge Fund Terms and Structures 88Fund of Hedge Funds versus Direct Investment 89Hedge Fund Investment Due Diligence 90Hedge Fund Operational Due Diligence 92Hedge Funds in the Post-2008 World 93Conclusion 94Notes 94CHAPTER 6 Private Equity 95Private Equity Investment Strategies 95Why Invest in Private Equity? 98Structure and Terms 99Private Equity Risks 100Direct Private Equity versus Private Equity Fund of Funds 101Selecting Private Equity Managers 102Benchmarks 102Conclusion 103Notes 103CHAPTER 7 Real Assets 105Commodities 106Equity Real Estate Investment Trusts and Private Real Estate 108Farmland 109Energy Infrastructure Master Limited Partnerships 111Broad Infrastructure Investing 112Timberland 113Gold 115Other Investible Real Asset Categories 116Conclusion 117Note 117CHAPTER 8 Performance Measurement and Evaluation 119Why Monitor Performance? 119Performance Calculations 119Benchmarks 120Market Index Basics 120Investment Style 121Major Market Indices 123Determining the Right Index 124Peer Group Universes 124Modern Portfolio Theory Performance Metrics 126Style Analysis 127Portfolio Analysis 128Performance Reporting 128Conclusion 129CHAPTER 9 Structuring an Effective Investment Committee 131Procedures 131Committee Structure 132Committee Makeup 133When an Investment Committee Needs Outside Help 134Effective Use of the Consultant 135Conclusion 136CHAPTER 10 Outsourced Chief Investment Officer Services 137Overview 137Why Outsource? 138Outsourced Services 139What Is Done in Conjunction with the Committee? 139Potential Benefits 139Finding a Firm 140Characteristics 140The RFP 141Interviewing Finalists 141Fees 142The Contract 142Reporting 143Conclusion 143CHAPTER 11 Environmental, Social, and Corporate Governance-Focused Investing 145History and Evolution 145Negative Screening 146Positive Screening 146Shareholder Advocacy 146Community Investing 147Strategy Considerations 148Investment Selection 149Separate Accounts 149Mutual Funds 149Commingled Funds 149Exchange-Traded Funds 150Alternative Investments 150Performance Impact of ESG 151Incorporating ESG into Investment Policy 151Conclusion 152Notes 152CHAPTER 12 Selecting Vendors 153Custodians 153Record Keepers and Administrators 156Broker/Dealers 157Transition Managers 158Conclusion 160CHAPTER 13 Hiring an Investment Consultant 161The Investment Consultant 162Identifying a Qualified Investment Consultant 162Effective Use of a Consultant 168Conclusion 168CHAPTER 14 Behavioral Finance 169Trying to Break Even 170Snake Bitten 170Biased Expectations and Overconfidence 170Herd Mentality 171Asset Segregation or Mental Accounting 171Cognitive Dissonance 171Anchors 172Fear of Regret and Seeking Pride 172Representativeness 172Familiarity 173Investor Personality Types 173Risk-Seeking Behavior 173Naturally Occurring Ponzi Schemes and Market Bubbles 174Conclusion 175Note 175CHAPTER 15 Legal Aspects of Investing Charitable Endowment, Restricted, and Other Donor Funds 177Nature of Endowment or Restricted Funds 177Endowments Created by the Board 178Donor-Created Endowment Funds 178Donor-Created Restricted Gifts or Funds 179GAAP Accounting Treatment 179General Statement about Investing Endowment 179Context: The Historical Prudent Man Rule 180Trusts: The Prudent Investor Act 180Uniform Prudent Management of Institutional Funds Act 181Private Foundation Rules 184Conclusion 185Final Thoughts 187Takeaways 188Conclusions 188Appendix: Case Study: Developing Capital Market Assumptions 189About the Authors 209About the Contributing Authors 211Index 215

Product details

• Authors: Robert DiMeo, Robert A DiMeo, Robert A. DiMeo, Robert A. (Dimeo Schneider & Associates Dimeo, DiMeo Robert A., Matthew Porter, Porter Matthew, M Rice, Matthe Rice, Matthew Rice, Matthew Dimeo Rice, Matthew/ Dimeo Rice, Rice Matthew, RICE MATTHEW DIMEO ROBERT PORT
• Publisher: Wiley, John and Sons Ltd
• Languages: English
• Product format: Hardback
• Released: 20.02.2012
• EAN: 9781118004524
• ISBN: 978-1-118-00452-4
• No. of pages: 240
• Series: Wiley Nonprofit Authority; Wiley Nonprofit Authority
• Subjects: Social sciences, law, business > Business > Management; Business & management, Wirtschaft u. Management, Gemeinnützige Einrichtung, Gemeinnützige Organisationen / Finanz- u. Rechnungswesen, Non-Profit Organizations / Finance & Accounting