Glossary

A 60/40 Index Balanced Fund refers to a mutual fund investment strategy that maintains a fixed asset allocation of 60% passive equities and 40% passive bonds.

A 70/30 Index Balanced Fund refers to a mutual fund investment strategy that maintains a fixed asset allocation of 70% passive equities and 30% passive bonds.

Absolute Return refers to strategies aiming to generate returns with minimal directional market exposure. This results in sources of return that are not correlated to traditional financial markets and are instead driven largely by active manager skill. Managers focused on the Absolute Return asset class would generally have a broad remit to invest across geographies and asset types. However, it also includes more specialised strategies such as merger arbitrage, equity market neutral and fixed income arbitrage.

Alpha (α) is used to describe an investment’s outperformance versus the market, reflecting its excess return (either positive or negative) over an above what would be achieved by investing passively.

A balanced fund is a type of fund that invests in a diversified mix of stocks and bonds, typically aiming to provide a balance of growth, income, and stability to investors.

Basis points (BPS), often abbreviated as bp, bps, or bips, are a financial unit equal to 1/100th of 1%, or 0.01%. Basis points are used to denote changes in the value or rate of a financial instrument.

Co-investment refers to the practice of investing in an asset alongside an asset manager, typically at low or no fees.

This practice is often restricted to large institutional investors who have established relationships with the asset managers.

Commodities such as oil, gas, agriculture, mineral and metals are the basic goods used in commerce and are often tradable with other goods of the same type. They are also inputs in the production of other goods and services.

Commodity investments are generally made via financial derivatives.

Asset class comprising stable income-producing real estate, with low or no leverage. The asset class offers an income yield and the opportunity for long-term capital appreciation and inflation protection.

Developed market public equities refer to shares of publicly traded companies that are based in countries with developed economies. These markets typically have a high level of liquidity, regulatory oversight, and market transparency.

Emerging market public equities are shares of companies located in developing economies, which are often characterised by rapid growth and industrialisation. These markets may offer high growth potential, but they also come with a higher level of risk due to political instability, lower market liquidity, and less transparency.

The Endowment Model of investing is characterised by 1) high stable risk level, 2) diversification across asset classes, 3) large allocation to alternative asset classes, including private markets and 4) allocation to external asset managers. The Endowment Model was popularised by the former CIO of the Yale Endowment David Swensen, outlined in his 1999 book “Pioneering Portfolio Management”.

The dialogue that we have with asset managers to assist asset them in improving their investment appraoch as well as their ESG integration and active ownership practices.

Our measure of return on manager fees measured as the ratio of gross-of-fee outperformance of an investment to the fees associated with that investment.

A set of companies or assets that have been excluded from the investable universe based on non-financial factors to express certain values and beliefs.

A family office is an organisation that provides comprehensive financial and investment services to High Net Worth Individual (HNWI) or families. Unlike conventional wealth management firms, family offices provide an all-inclusive solution including financial planning, investment management, budgeting, insurance, philanthropy, estate planning, tax services, and more.

Foreign Exchange (FX) is the conversion of one currency into another.

Futures are standardized financial contracts obligating involved parties to transact an asset, either physical commodities or financial instruments, at a fixed price on a set future date. They’re commonly used for hedging risks or speculating in trading scenarios.

A debt security issued by a sovereign government. Government Bonds offer contractual income yield and repayment of pricipal, typically with limited or no credit risk.

Common abbreviations referring to the first half (January to June) / second half (July – December) of a calendar year.

These are strategies which will typically take both long and short positions in publicly listed equities. Investing in both long and short positions results in a lower equity market exposure than long-only equity investing, and provides scope for generating outperformance through shorting.

Investment approach by which the asset manager intentionally invests to create a positive impact aligned with their beliefs or mission. This also includes what we refer to as “engagement strategies” where the asset manager has a measurable impact by virtue of their engagement and/or activism with public or private company management.

Inflation Linked Bonds (ILBs) are debt instruments, primarily issued by sovereign governments, where the principal and/or coupon payments are indexed to inflation.

An institutional investor is an organization that invests money on behalf of other people. Typical institutional investors include endowments, foundations, pensions, sovereign wealth funds, wealth managers and boutique investment banks.

Offers contractual income yield and repayment of principal with the risk of loss due to credit default. Includes investment grade bonds, high yield bonds, bank loans, emerging market sovereign bonds, asset-backed credit and structured credit instruments.

Local currency refers to the currency in which an investment is denominated.

Multiple on Invested Capital (MOIC) is a metric used to describe the value or performance of an investment, typically in Private Equity. MOIC is calculated as (Value + Distributions Received) / Invested Capital.

Refers to A portfolio invested across multiple asset classes e.g., absolute return, hedged equities, liquid credit, private equity, private debt

An Outsourced Chief Investment Office (OCIO) refers to the full or partial outsourcing of the chief investment office role by a firm, endowment, foundation, private family or similar institution. OCIOs should offer the following: comprehensive investment program management including an agreed overall investment policy, strategic and tactical asset allocation, portfolio construction, asset manager selection, risk monitoring and management, performance reporting and attribution, and middle and back-office operations. Additionally, OCIOs are fiduciaries and, as such, must provide assurance to their clients that they have the skills, resources, organisational cohesiveness and stability to serve their clients for many years to come.

Post-Acquisition Operating Value Added (PAOVA) refers to the operational improvements made by investors to their portfolio companies following acquisition.

Partners Capital Risk Managed Endowment Management Approach (PRMEA) refers to our proprietary enhancwments to the traditional Endowment Model.

Private Debt, also known as Private Credit, is an asset class comprising the provision of lending to companies outside of that provided by banks or public markets.

Private Equity is an asset class comprising investments in the equity of private companies.

Private Equity Real Estate (PERE) is an asset class comprising investments in private real estate development or redevelopment projects. The asset class also includes the acquisition of distressed properties and real estate debt. PERE often offers an income yield and the opportunity for some long-term capital appreciation and inflation protection.

Private market investing refers to investments in debt or equity instruments that are not traded on public exchanges. The debt and equity components of private markets are individually referred to as Private Debt and Private Equity.

QTD (quarter-to-date) is an abbreviation used to reference the time from the start of the current quarter to the present.

Investment approach integrating financially material ESG considerations as well as pursuing high standards of stewardship and fiduciary responsibility.

Risk budgeting refers to the process of determining the appropriate level of risk that should be taken.

The process used to exclude investee companies or assets from the investable universe based on non-financial factors to express certain values and beliefs.

Stewardship is the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society. (UK Stewardship Code Definition)

Strategic Asset Allocation (SAA) refers to an investor’s long-term target asset allocation.

Umbrella term for ESG integration, responsible investing and impact investing.

Tactical Asset Allocation (TAA) refers to an investor’s short-term allocation deviations from their Strategic Asset Allocation in pursuit of higher risk-adjusted returns.

Investing approach whereby an asset manager orients their portfolio towards a certain thematic focus, such as low carbon emissions, small environmental footprint, or a particular sectoral exposure.

YTD (year-to-date) is an abbreviation used to reference the time from the start of the current year to the present.