Investment Beliefs: The Governance Bedrock for Investment Committees
Authors: Chris Adkerson, CFA, CAIA; Partner; Pavilion, a Mercer Practice; Texas Hemmaplardh, CFA; Partner; Pavilion, a Mercer Practice; Russ LaMore, CFA, CAIA; Partner; Pavilion, a Mercer Practice; Cori Trautvetter, CAIA; Partner; Pavilion, a Mercer Practice
Endowments and foundations are typically governed by members of a volunteer investment committee who are charged with fiduciary oversight of a perpetual portfolio that is closely tied to the organization’s mission. Yet it’s difficult to maintain the discipline of managing a long-term portfolio as markets ebb and flow, investment fashions change, and investment committees turn over.
The paradox of a virtually unlimited time horizon, while investment environments and organizations evolve, suggests the need for a critical tool in the governance toolbox in order to keep a clear focus and ensure successful outcomes. Crafted wisely, a set of agreed-upon investment beliefs can serve as a tool to enable investment decisions that help endowments and foundations sustain their spending needs now and in the future.