An Evolved Endowment Model
We were founded in 2001 with a mission to take the most advanced proven institutional investment approach to our clients. The underpinning of our investment approach at our founding was referred to simply as the “US endowment model” as practiced then and now by such respected endowment investors as Yale, Stanford and Princeton. Since then we have evolved our investment approach beyond the basic building blocks of that model to include cutting edge risk management techniques, tactical asset allocation, value-added relationships with our core asset manager partners and creative co-investment strategies across many asset classes.
Partners Capital Outsourced CIO Investment Platform
Today we advise over 80 different endowments and foundations around the globe, including university endowments, private school endowments, independent foundations, family foundations, museum endowments and charitable hospital foundations. Most typically, we are engaged by clients as their sole outsourced investment office (often described as an outsourced chief investment officer or OCIO). However, we are much more than an outsourced CIO, as clients gain access to our 50 person global research team embodying deep expertise in each asset class and such clients are served by their own portfolio management team usually comprising three senior investment professionals, a portfolio analyst and two operations team members.
Whether working in an advisory or discretionary capacity, as their outsourced investment office, we work in a highly integrated manner with the endowment or foundation’s internal team and its investment committee to develop a clear long term investment strategy usually covering the full portfolio. We generally take full responsibility for executing that strategy including overall portfolio asset allocation and populating the portfolio with best in class asset managers in line with the agreed risk budget. In certain circumstances, we work with clients on a subset of their portfolio, usually focused on specialist or alternative asset classes.
Why Endowments And Foundations Outperform
With our focus on endowments and foundations (E&Fs) over the last 16 years, we have come to appreciate the many aspects of investing that are common to most E&F investors and those important differences. The perpetual nature of most E&F investors affords them a powerful investment competitive advantage in the form of a long investment time horizon. At Partners Capital, we believe that long term investors should outperform short term investors if they take full advantage of this long time horizon through relatively high allocations to illiquid asset classes and weathering the market’s ups and downs by holding firm to a relatively high stable risk profile.
Customized Portfolio Management
While there are many common issues that face endowment and foundation investors, we are clear that every endowment and foundation has different goals, constraints and philosophies around investing. No two E&F portfolios at Partners Capital are alike as each Client CIO team tailors portfolios against the varying needs and profile of each client. Years of experience have armed us with valuable expertise and tools relevant to most E&F’s including our understanding of the range of spending rules and how they influence overall investment policy. Specific tools we deploy differentially in E&F portfolios we advise include risk budgeting, liquidity budgeting, look through fee analysis, foreign currency management, manager hit-rate analysis, responsible investing strategies and co-investment programs, among many other tools.
Getting The Most Out Of Investment Committees
The average Partners Capital Client CIO working in our institutional client practice participates in approximately 60-120 investment committee meetings each year and has been doing this for many years. Our client investment committees comprise some of the most sophisticated investors in the world coming from private equity, hedge fund, property and Chief Investment Officer investment roles among others. We see members as an extremely valuable input to the overall investment process and chalk up our own expertise to having listened and learned from talented members over the years. We attribute much of our expertise in investment committee management to what we have learned from our clients (see our Whitepaper: Best Practice in Investment Committee Management which we have written specifically for the investment committee chair).
Our Endowment And Foundation Network
To augment this expertise, we have long benefited from our network of relationships in the larger end of the E&F world with their CIOs and their teams. There is rarely a day that goes by where we are not in active dialog with the investment professionals in our extended institutional network (what we refer to as our “triangulation network”) of endowments, foundations, sovereign wealth funds and institutional family offices comparing notes on investment strategy, asset class insights and asset managers.
We started our corporate life committed to finding our clients the best investments regardless of where they are in the world in each asset class. Our long established presence in Europe, North America and Asia has enhanced this ability complemented by the highly diverse origins of our team comprising over 25 different nationalities.
Your Mission Is Our Motivation
Serving endowments and foundations is highly motivating for our team. There is little that is more gratifying than growing asset values to benefit the many powerful causes pursued by our endowment and foundation clients, whether that is funding scholarships for underprivileged students to attend an extraordinary educational institution or funding biotechnology research aimed at developing cures to crippling diseases affecting people around the world. In many cases, we are unashamed advocates for our charity clients when it comes to our efforts to secure allocations of rare capacity with exceptional asset managers who choose to allocate such capacity to our clients pursuing causes they care about.