Most large, multi-billion dollar endowments have performance records that make them worthy of emulation. Typically their investment practices have the following common characteristics:
- Stated Objectives - Investment practices and expectations are governed by approved written policies.
- Accountability - Endowments have boards of trustees and investment committees which serve as fiduciaries and overseers. Stated objectives are measured, reviewed and updated when necessary.
- Long Term Focus - Endowments are designed to last for perpetuity which allows them greater investment flexibility.
- Prudent Diversification - Large endowments typically allocate among a broad spectrum of traditional and alternative asset classes to manage risks and to deliver consistent long term results.
- Broad Resources - Large endowments maintain a staff of dedicated professionals to exercise continuous due diligence over managed assets. They also have the necessary capital to retain high quality investment managers and consultants that are not typically available to most investors.
- Reporting - Endowments carefully track their investments and measure their performance against their stated objectives, market benchmarks and peer groups.
