Form Purpose
Source Date Keywords
Investment policy (6pps) For benchmarking purposes. Policy outlines the investment objectives, allocation guidelines and responsibilities of the board chair, investment committee and role of outside management to steward the Foundation’s endowment. Rasmuson Foundation (Large-size foundation) 2005 Received by the Council on Foundations Endowment, distribution requirement, geographic distribution, investment guidelines, property, asset allocation, outside management
Investment Policy
“Helping others is an Alaskan tradition. Both the earliest Alaskans and those who came here to settle had to rely on one another to build a good community and a good life. This was as true for the Rasmuson family as for everyone, and when my mother Jenny founded the Rasmuson Foundation, she was expressing her concern for all Alaskans who might need help and for the future of our state. As she honored my father, she was also foreseeing a time when Alaskans could not reach out to all their neighbors personally and would count on organized efforts to help those in need. Today the Rasmuson Foundation continues this tradition by supporting non-profit organizations which strive to improve the quality of life for people throughout the state. By assisting these groups which address basic needs, special circumstances, the arts and education, the Rasmuson Foundation contributes to healthy, enriched and productive lives for Alaskan of all ages. Much credit is due the volunteers and professionals who dedicate their talents to non-profit endeavors. Everyone in the state benefits from their hard work. In the tradition of Alaskans, the Rasmuson Foundation is glad to lend a hand.” Elmer E. Rasmuson
General Investment Objectives The portfolio shall be managed with primary consideration for maintaining the purchasing power of the fund’s principal as well as the earnings to be derived from the investment and not for speculation. Earnings are to be sufficient to meet the annual qualified distribution requirement and to protect principal from erosion in value through inflation.
Disclaimer: This document is a sample that has been provided in order to advance the public interest for educational and guidance purposes only. It is not standard or a model form and should not be used as such. Because this document has been drafted to meet the unique program needs of the organization and to satisfy specific requirements applicable to the organization, the actual content of a particular document may not be appropriate for your organization. Therefore, while this document may serve as an excellent starting point for drafting or revising similar documents, independent judgment and, where appropriate, the advice of competent legal counsel is strongly recommended.
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Except for sufficient liquid assets to meet the qualified distribution requirement, the Foundation may assume a long term perspective when making investment decisions. Responsibilities The Rasmuson Foundation Board of Directors shall oversee the investment portfolio management process and direct the Chairman, or his designee, to make periodic reports on the allocation of Foundation funds among the various asset classes, investment performances and compliance with this policy. An Investment Committee may be selected by the Chairman and may include as many board and non-board members as the Chairman deems appropriate. The Chairman or the Investment Committee, will approve the portfolio’s long-term asset allocation strategy, review investment recommendations, approve outside investment managers, and insure that the security selection is consistent with the overall portfolio strategy. The Chairman or the Investment Committee may use outside investment consultants and other investment professionals, as is considered necessary in the investment decision making process. The Chief Financial Officer will submit recommendations, execute authorized transactions, measure absolute and relative investment performances, and make periodic reports to the Chairman, Investment Committee and the Board of Directors. Strategic Asset Allocation Recognizing the long time horizon for the funds in the Rasmuson Foundation and that real estate and equity investment offer the greatest potential for the highest return on capital over time, at least 50% of the Foundation’s total market value should always be committed to these two asset classes. Currently, the Foundation has a significant concentration of its assets in Wells Fargo (WFC) Stock and will reduce this concentration over time. The following investment classes and percentages represent the Foundation’s target allocation: Asset Class Capital Preservation Real Estate Equities Alternative Investments Target Allocation1 15% 5% 55% 25% Target Range 10%-20% 0%-10% 50%-80% 10%-25%
Outside Investment Management
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Deviations from target allocation percentages will be permitted without action and generally are the result of transitioning in or out of asset classes and short-term performance variations. Deviations outside the range should result in adjustment in cash flow or other actions to move toward the target allocation within a reasonable period of time. Disclaimer: This document is a sample that has been provided in order to advance the public interest for educational and guidance purposes only. It is not standard or a model form and should not be used as such. Because this document has been drafted to meet the unique program needs of the organization and to satisfy specific requirements applicable to the organization, the actual content of a particular document may not be appropriate for your organization. Therefore, while this document may serve as an excellent starting point for drafting or revising similar documents, independent judgment and, where appropriate, the advice of competent legal counsel is strongly recommended.
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The Foundation will rely extensively on external professional managers to meet specific investment mandates within each asset class. Any exceptions to this policy shall be approved by the Chairman or the Investment Committee, and must meet the same performance standards as the externally managed assets. The criteria for selecting an active manager will consider the following: Superior historical performance over a complete market cycle; Stability of the professional staff; Reputation among peers and clients; Financial stability of the firm; Consistent, defined investment process which delivers empirically measurable “addedvalue”; Compensation aligned and in proportion with investment risks for “High Risk Strategies”; Significant co-investment by principles for “High Risk Strategies”; Specific investments should have significant participation by other institutional investors. Investment Guidelines Investments shall be made with care, skill, prudence and diligence under the circumstances currently prevailing and that a prudent person acting in a like capacity familiar with these matters would use; Investments shall be diversified so as to minimize the risk of loss and to maximize the rate of return, unless under the circumstances it is clearly prudent not to do so; The Chairman or the Investment Committee may approve the use of derivatives and options to achieve investment goals; Proxy voting should maximize the total return from investments; Managers must immediately notify the Foundation of significant changes in professional staff, philosophy, strategy or style; Investment management fees should be consistent and reasonable when compared with amounts charged for comparable services provided to similarly sized clients; Investment transactions shall be executed at competitive rates on a “best execution basis”.
Disclaimer: This document is a sample that has been provided in order to advance the public interest for educational and guidance purposes only. It is not standard or a model form and should not be used as such. Because this document has been drafted to meet the unique program needs of the organization and to satisfy specific requirements applicable to the organization, the actual content of a particular document may not be appropriate for your organization. Therefore, while this document may serve as an excellent starting point for drafting or revising similar documents, independent judgment and, where appropriate, the advice of competent legal counsel is strongly recommended.
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Real Estate Investment Allocation
I. Investment products (see Exhibit A) As set forth on Exhibit A, the Foundation will obtain exposure to real estate through a number of different investment products and vehicles, covering a broad spectrum of return goals (core, core +, value, opportunity): Private equity o Direct, single property deals o Funds (both core/core + and more value or opportunistic funds) o Private operating companies Private debt o 1st mortgage lending o Mezzanine debt Public equity o Public operating companies (i.e., public REITs) Public debt o Commercial mortgage-backed securities (CMBS) o Public unsecured debt Comments: In general, the Foundation’s real estate return goal will be to seek a blended core/coreplus equity return of 10% to 15% (income plus appreciation) In general, the Foundation’s portfolio will be weighted toward private equity investing through private operator/developer funds and, in certain instances, direct, single-property deals The Foundation may, at times, obtain up to 100% of its real estate exposure through investments in public operating companies (i.e., public REITs) o On the upside, REIT stocks afford liquidity and the advantage of being marked daily to the market o On the downside, REIT stocks afford additional exposure to the equity market (REIT stocks fall in and out of favor with public investors and, historically, have not always reflected underlying “net asset value”). Furthermore, public vehicles may be subject to restrictions (e.g., leverage limitations) imposed by the equity market that are not applicable to private vehicles The Foundation may ascribe a portion of its allocation to debt securities (e.g., CMBS and mezzanine investments) II. Investment managers (IMs) vs. operators/developers (O/Ds)
The Foundation will use different types of partners to obtain its real estate exposure:
Disclaimer: This document is a sample that has been provided in order to advance the public interest for educational and guidance purposes only. It is not standard or a model form and should not be used as such. Because this document has been drafted to meet the unique program needs of the organization and to satisfy specific requirements applicable to the organization, the actual content of a particular document may not be appropriate for your organization. Therefore, while this document may serve as an excellent starting point for drafting or revising similar documents, independent judgment and, where appropriate, the advice of competent legal counsel is strongly recommended.
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IMs vs. O/Ds
Target Allocation 25%
Target Range 0% 50% 25% 100% 0% 50%
Real Estate Investment Managers Operators/developers o O/D commingled funds o O/D sponsored single-property deals Comments:
50% 25%
See Exhibit B for a list of positives and negatives associated with investing through investment managers vs. operators/developers Majority of investing will be made through operators and developers who focus on single or concentrated asset classes and are raising their own funds; consequently, the Foundation will invest more directly in real estate than through the two-tiered investment manager structure. At the same time, by investing through the O/D fund structure (as opposed to O/D sponsored singleproperty deals) the Foundation will still achieve diversification Real estate investment managers will be used for specific investment products, such as opportunistic investing (20%+ return goals), CMBS investing, and/or investments in public REITs. Except where the Foundation is invested 100% in REIT securities, it is unlikely that 100% of its exposure would be made through traditional investment managers. The Foundation may also make investments in REIT securities directly In certain asset classes, the Foundation may invest in O/D sponsored, single-property deals with select partners with whom the Foundation has developed, or intends to develop, a strong relationship The Foundation will not invest more than $10 million with any one investment manager or operator/developer
III.
Property allocation
The Foundation will seek diversification by property type: Property type Target Allocation 25% 25% 25% 25% Target Range 0% - 50% 0% - 50% 0% - 50% 0% - 50%
Office Industrial Multifamily Apartment Retail
Disclaimer: This document is a sample that has been provided in order to advance the public interest for educational and guidance purposes only. It is not standard or a model form and should not be used as such. Because this document has been drafted to meet the unique program needs of the organization and to satisfy specific requirements applicable to the organization, the actual content of a particular document may not be appropriate for your organization. Therefore, while this document may serve as an excellent starting point for drafting or revising similar documents, independent judgment and, where appropriate, the advice of competent legal counsel is strongly recommended.
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Other (e.g., Lodging/Gaming, Health Care, Cold Storage) Comments:
0%
0% - 25%
Goal will be to achieve broad diversification by evenly balancing the real estate portfolio among the four main property types – office, industrial, multifamily apartment and retail (the “Big Four”) Although goal is to achieve even balance among the Big Four property types, at times the Foundation may weight its portfolio up to 50% in any one property type In certain instances where it has identified a particular opportunity, the Foundation may invest in “other” or alternative property types such as hotels, gaming, health care or cold storage, but generally it will focus its real estate investing on the Big Four property types IV. Geographic distribution
The Foundation will seek geographic diversification: Comments: Goal will be to achieve geographic balance across domestic U.S. and, under certain circumstances, international property exposure Geographic distribution will largely be dictated by the Foundation’s investments and the focus of its fund managers/operators/partners; however goal would be to avoid overconcentrations (e.g., 50% of portfolio in California) If at all, international property exposure would likely be obtained through large, macrostyle fund managers, such as an investment in an opportunity fund.
Disclaimer: This document is a sample that has been provided in order to advance the public interest for educational and guidance purposes only. It is not standard or a model form and should not be used as such. Because this document has been drafted to meet the unique program needs of the organization and to satisfy specific requirements applicable to the organization, the actual content of a particular document may not be appropriate for your organization. Therefore, while this document may serve as an excellent starting point for drafting or revising similar documents, independent judgment and, where appropriate, the advice of competent legal counsel is strongly recommended.
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