SEI Investments Announcement:
Saskatoon Community Foundation’s Board of Directors and Investment Committee announced on September 20, 2021 the decision to adopt a new investment management model known as an Outsourced Chief Investment Officer (OCIO). Following an extensive review, we have selected SEI Investments Canada Co. as OCIO service provider with CIBC Mellon as the external custodian.
Fundholder questions and answers:
Here are some detailed answers about questions you may have as the foundation transitions to investment management with SEI Investments.
What is the power of an endowment to make a difference in community?
Every year, the Saskatoon Community Foundation supports a wide range of community projects and initiatives. In 2019, the foundation granted over $3.3 million for programming and initiatives on behalf of donors. Our role is to create a bridge for donors with charities to enable them to do their good work.
Donations are held in trust…in perpetuity. Endowments generate income that is used to make grants. Our board, staff, and investment committee efficiently manage an endowment of nearly $58 million, earning a net rate of return in the last ten years of over seven per cent. A portion of the income provides a steady stream of grants that will benefit Saskatoon for the future.
“Our role is to create a bridge for donors with charities to enable them to do their good work.” — CEO Carm Michalenko
What makes up the Pooled Investment Fund?
The fund is made up of donors’ endowed funds, agency endowed funds, and managed funds. Invested together as a larger pooled fund, the collective impact of the smaller funds is greater.
How is the Pooled Investment Fund invested?
The fund is invested following the Foundation’s Statement of Investment Principles and Statement of Investment Beliefs as per the Investment Committee and Board of Directors. The asset mix may include equities, bonds, mortgages, real estate, infrastructure, cash and short-term investments, and other investments.
How does the foundation make decisions on spending the Pooled Investment Fund?
The Board of Directors sets the Foundation’s granting rate annually, based on the Investment Committee’s recommendation. The aim is to protect the fund against inflation for long term community benefit, and provide stability in the granting amounts available for recipients.
What safeguards are in place to protect funds?
The Foundation’s Statement of Investment Principles outlines how funds are protected through performance measurement, rebalancing of the asset mix, reporting, and monitoring of the Investment Manager. Our principles are defined in the Statement of Investment Beliefs:
- Good governance at all levels of Fund decision-making will improve Fund returns.
- Asset mix is the primary determinant of risk and return and is the most important investment decision.
- Tactical asset allocation at a Fund level is unlikely to improve results over the long term.
- Higher expected returns generally require an investor to assume more risk.
- Passive management may be a reasonable strategy to obtain market exposure in markets where the median active manager is unable to add value over the long term after costs.
- Active management may be a reasonable strategy in markets where the median active manager is able to add value over the long term after costs.
- Diversification can improve the risk-return profile of the Fund.
- Cost-conscious decision-making will improve long-term Fund results.
- Philosophy, process, people, and long-term performance are the key metrics for successful investment manager identification, retention, monitoring, and termination.
- Reactive decision-making based on short-term market conditions or performance can reduce Fund performance.
- Environmental, Social, and Governance (ESG) factors may impact corporate sustainability and profitability and are therefore relevant considerations for the Fund’s mandate managers.
- Currency movements will generally be neutral in terms of their impact on returns over the long term. However, currency risk can provide an additional source of diversification reducing Fund volatility.