Foundation and Endowment Investing

In Foundation and Endowment Investing, authors Lawrence Kochard and Cathleen Rittereiser offer you a detailed look at this fascinating world and the strategies used to achieve success within it. Filled with in-depth insights and expert advice, this reliable resource profiles twelve of the most accomplished Chief Investment Officers within today’s foundation and endowment community—chronicling their experiences, investment philosophies, and the challenges they face—and shares important lessons that can be used as you go about your own investment endeavors.

Preface ix

Acknowledgments xiii

About the Authors xv

PART ONE Foundations and Endowments Rise as Powerful Institutional Investors

CHAPTER 1 The Evolution of Foundation and Endowment Investment Management 3
From Poorhouses to Powerhouses

CHAPTER 2 Foundation and Endowment Investing 101 19
Essential Practices of a Successful CIO

CHAPTER 3 The Investment Landscape 43
You Are Here

PART TWO Profiles in Capital: Philosophies and Strategies from Leading Foundation and Endowment Chief Investment Officers

CHAPTER 4 Another Sage of Omaha 63
Laurie Hoagland, CIO, Hewlett Foundation

CHAPTER 5 Doctor, Lawyer, Investment Chief 77
Dr. Allan S. Bufferd, Treasurer Emeritus, Massachusetts Institute of Technology

CHAPTER 6 Leading the Evolution 93
Alice Handy, CIO, Investure, LLC

CHAPTER 7 Partner, Patriot, and Performer 109
Scott C. Malpass, CIO, University of Notre Dame

CHAPTER 8 Built an Endowment through Common Sense 127
William Spitz, CIO, Vanderbilt University

CHAPTER 9 Investment Artist with Her Own Perspective 143
Ellen Shuman, Vice President And CIO, Carnegie Corporation of New York

CHAPTER 10 Master of All Trades 157
Bruce Madding, CIO, Henry J. Kaiser Family Foundation

CHAPTER 11 Agile Investment Engineer 173
Bob Boldt, CIO, Agility Funds

CHAPTER 12 Driven by Intellectual Curiosity 191
Donald W. Lindsey, CIO, George Washington University

CHAPTER 13 The CIO as CEO 205
Jonathan Hook, CIO, Baylor University

CHAPTER 14 Navigating New Investment Waters 225
Daniel J. Kingston, Managing Director, Portfolio Management, Vulcan Capital

CHAPTER 15 Invest without Emotion, Act with Conviction 241
Mark W. Yusko, Chief Investment Officer, Morgan Creek Capital Management

PART THREE Summary and Analysis: Key Points on Investments, Endowment Management, and the Future

CHAPTER 16 Lessons for Investors 265
Investment Principles and Advice

CHAPTER 17 The Business of Foundation and Endowment Investment Management 273
Impact of Comparison, Competition, and Compensation

CHAPTER 18 Real Rewards 279
Investing is a People Business

Notes281

Index285

"…informative and entertaining…an excellent resource for anyone who is considering a career move into this field or who has not-for-profit organizations as clients." (Financial Analysts Journal, July/August 2008)

LAWRENCE E. KOCHARD, PHD, CFA, is Chief Investment Officer of the Georgetown University endowment and a widely recognized leader in the foundation and endowment investing community. Previously, he was managing director of equity and hedge fund investments for the Virginia Retirement System and an adjunct finance professor at the University of Virginia. Kochard was also a vice president with Goldman Sachs.

CATHLEEN M. RITTEREISER is an alternative investments marketing and business development executive specializing in foundations, endowments, and other institutional investors. Her experience includes Alternative Asset Managers, LP, an emerging manager investment fund, Symphony Asset Management, a Nuveen Investments company, and Merrill Lynch. Rittereiser's Web site is www.cathleenrittereiser.com.

Foundation & Endowment Investing

Having achieved impressive returns over a number of years, foundations and endowments are finally being recognized as investment powerhouses. With sophisticated portfolios managed by talented financial professionals, these institutions have become increasingly influential due to their long-term perspective—which gives them the latitude to take more investment risks and adopt new asset classes long before other investors.

Now, in Foundation and Endowment Investing, authors Lawrence Kochard and Cathleen Rittereiser offer you a detailed look at this fascinating world and the strategies used to achieve success within it. Filled with in-depth insights and expert advice, this reliable resource profiles twelve of the most accomplished Chief Investment Officers within today's foundation and endowment community; chronicling their experiences, investment philosophies, and the challenges they face in allocating assets, managing risks, and selecting from an increasingly complex set of investment opportunities.

Some of the individuals you'll hear from along the way include:

• Laurie Hoagland, CIO, Hewlett Foundation
• Scott C. Malpass, CIO, University of Notre Dame
• Alice Handy, CIO, Investure, LLC
• William Spitz, CIO, Vanderbilt University
• Don Lindsey, CIO, George Washington University
• Ellen Shuman, Vice President and CIO, Carnegie Corpo ration of New York

While each professional profiled skillfully discusses the strategies used to improve the financial health of their respective institutions, they also take the time to bridge the gap between theory and practice by describing how to apply the principles they've pioneered in real-world market conditions.

Besides providing you with the practical perspectives of top investors and institutions, Foundation and Endowment Investing—through the combined expertise of two well-informed authors—clearly lays out the basic background and current landscape of this ever-evolving industry, and shares important lessons that can be used by those in the broader investment community.

As investors, we all want to do a better job establishing a disciplined investment process in order to generate better returns on our portfolio—whether it's for the benefit of an institution or our families. With Foundation and Endowment Investing as your guide, you'll discover how to do this and much more as you gain from the experience of today's top investment officers.