What's wrong with this picture?
Only 30% of European foundations say investment performance was an important factor when deciding how much money to pay out, according to a new Watson Wyatt survey.
The survey of 285 fiduciaries at 250 foundations found about 12% of German and Italian foundations and 6% of Swiss and U.K. foundations said investment policy was often discussed at board meetings — compared with 90% saying they frequently discussed operations.
What's more, only 25% of fiduciaries received any formal training, and fewer still were exposed to investment issues. Despite that lack of expertise, 62% of Swiss and 47% of Germans opposed delegating investment decisions to outside experts. In contrast, two-thirds of British and 54% of Italian fiduciaries said investments should be delegated.
The majority of Italian and German foundations also invested less than one quarter of their assets in stocks, while Swiss and British foundations were more aggressive. "Notwithstanding the divergence of views on equity returns, the survey shows that 45% of foundations with target spending rates above 4% of assets indicate an optimal equity allocation below 25%. This would appear unrealistic in the current market environment," Kevin Carter, Watson Wyatt's European head of investment consulting, said in a release.