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Informationen zum Autor Over a period of more than twenty years Chris Russell managed money for some of the largest Endowments, Foundations and Pension Plan sponsors in the US, the UK and Asia. Currently he is a director of the management company of a 600 year old not-for-profit Foundation in the City of London. He is an associate of the macro economic and asset strategy research boutique, GaveKal, and a non-executive director of one of the largest dedicated pensions investment management companies in the UK and of a number of closed and open ended investment companies. These include listed companies on the New York and London Stock Exchanges investing in European and Asian public and private equity and unlisted companies involved in hedge fund strategies. He is a Fellow of the Institute of Chartered Accountants in England and Wales, a Fellow of the UK Society of Investment Professionals and a Fellow of the Royal Society for the encouragement of Arts, Manufactures and Commerce. Klappentext Trustees are responsible for the stewardship of assets and for implementing the mission of their endowment or foundation. Almost invariably trustees delegate the management of those assets to agents who are investment professionals. In this increasingly sophisticated and litigious financial world there can be a growing gap of comprehension, exacerbated by mathematics and jargon, between trustees who are responsible and agents who are accountable. This book aims to fill that gap. The book draws on the author's own experience and research and that of generations of investment professionals and academics to explain the fundamentals of investment strategy. Key features are therefore: Aimed at professional trustees An holistic approach to strategy Avoidance of jargon and mathematics Focus on principles underlying asset strategy Zusammenfassung Trustees are responsible for the stewardship of assets and for implementing the mission of their endowment or foundation. Almost invariably trustees delegate the management of those assets to agents who are investment professionals. Inhaltsverzeichnis Foreword ix Preface xi Acknowledgments xvii 1 Introduction 1 1.1 Endowment fund characteristics 2 1.2 Constraints on endowments 4 1.3 History rhymes 6 1.4 The US endowment experience 8 1.5 Structure of the book 12 2 Language of Return 17 2.1 Economic return 17 2.2 Investment return 18 2.3 'Other income' not return 20 2.4 Income, capital and 'total return' 21 2.5 Real and nominal return 23 2.6 Absolute and relative return 26 2.7 Arithmetic and geometric return 28 2.8 Time-weighted return and money-weighted return 31 3 Elements of Return 35 3.1 Deriving return 35 3.2 Risk-free return 37 3.3 Premium for risk 38 3.4 Equity risk premium 41 3.5 The eighth wonder of the world 43 3.6 Valuation change 44 3.7 Drivers of return 48 3.8 Scenario analysis 49 4 Understanding Risk 53 4.1 Description of risk 53 4.2 Pascal's Wager 54 4.3 Chance 56 4.4 Co-movement and common factors 58 4.5 The Greek alphabet 62 4.6 Confidence 63 4.7 Consequences 64 4.8 Endowment fund risk 65 5 Spending Rules 69 5.1 The endowment dilemma 69 5.2 Micawber's rule 71 5.3 Pattern of flows 73 5.4 More scenario analysis 75 5.5 Determining an operating rule 76 6 Assets for Strategy 79 6.1 Back to the future 79 6.2 Investment approach 81 6.3 Classification of assets 82 6.3.1 Operational assets 84 6.3.2 Intergenerational assets 85 6.4 Asset categories 86 6.4.1 Cash 87 6.4.2 Short-dated and intermediate-term bonds 88 6.4.3 Long-dated bonds 89
