Mercer | Top 10 Investment Ideas for Endowments and Foundations

Mercer | Top 10 Investment Ideas for Endowments and Foundations

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Top 10 Investment Ideas for Endowments and Foundations in 2018
Calendar18 December 2017

Endowment and foundation (E&F) portfolios continue to benefit from strong equity markets, with overseas investments contributing at a greater rate than in most periods since the Great Financial Crisis. Loft from equities can provide false comfort, however, as changing market dynamics make the persistence of this bull run more fragile. At the same time, greater reliance on endowments makes institutions more vulnerable to adverse events. Staff and committees should apply a strategic perspective to processes and other operational considerations to ensure they provide the checks and balances necessary to support successful investment execution.

Be prepared to be opportunistic

Embrace the idea of “doing nothing” as being strategic

Upgrade the governance batphone

Undertake a disciplined resource-budgeting process

Consider the absolute dollars provided by your spending policy in addition to the spending rate

Identify secondary sources of liquidity

Revisit ESG investing as opportunities become more attractive as standalone investments

Reframe the active versus passive debate

Assess vulnerability to lawsuits against university-sponsored 403(b) plans 

Be aware of tax changes — and changing perceptions — for colleges and universities

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