Although foundation and endowment investment officers are less concerned about a slowdown in global growth now than they were a year ago, muted growth remains their greatest threat to investments, a quarterly NEPC survey said.
Forty-six percent of survey respondents said that a “slowdown in global growth” is the biggest threat to their near-term investment performance. However, this is down from 56% last quarter and 68% in the third quarter of 2014.
Forty-three percent think the economy is in a better place now than it was this time last year.
Long- and short-term risks were at the forefront of respondents’ minds. Long term, they felt not meeting the organization’s mission is their key concern. Shorter term, most are concerned with “balancing operation and spending needs with investment return/risk/liquidity.”
Within the past two years, just more than half of endowments and foundations (54%) have increased investment committee/operations interaction; 46% have increased investment committee/finance meetings; and 43% have added more liquidity to meet short-term obligations. Eighty-eight percent now discuss operational issues at investment committee meetings.
“The conversations on the investment committee-level about the budget seem to have shifted,” said Kristin M. Reynolds, a partner in NEPC’s endowment and foundation practice group, in a phone interview. “They’ve become more frequent than they have been in the past.”
Some 81% of respondents still measure the success of their investment program against market benchmarks, and more than half (56%) continue to compare results to their peer group performance.
The survey was conducted online in June.
