Our commitment is to provide best-in-class investment oversight for your charitable investments.
We are grateful for your confidence as you direct your charitable giving for a positive impact in our community. Here are some detailed answers about questions you may have as the Foundation transitions to investment management with SEI Investments.
Why is this change being made?
The Foundation periodically reviews its investment structure and options available in the market. During the most recent review the Foundation investigated whether its investment portfolio had grown large enough to permit the retainer of an investment consultant and multiple investment managers. It was discovered that an affordable model permitting this would be to retain a delegated investment solutions provider or Outsourced Chief Investment Officer (OCIO). A Request for information (RFI) was therefore issued to selected providers to collect more information.
How were the potential service providers selected?
Four members of the Investment Committee reviewed a list of potential OCIO service providers obtained from an OCIO industry survey. Several firms were eliminated because they lacked a Canadian office. Nine companies were selected and after additional research, four companies were selected.
How were RFI responses scored?
The RFI was issued to four of the leading delegated investment solutions providers in Canada and TDAM. Replies were scored independently by four different individuals from the Foundation’s Investment Committee against a matrix of relevant criteria. Teams from each service provider were given the opportunity to present their response to the Foundation. References were provided and checked.
Was TD Asset Management (Greystone) permitted to participate in the process?
Yes, TDAM was provided with the RFI and did participate. However, TDAM candidly confirmed that it did not provide investment consulting services and could not offer best in class investment funds from independent managers. TDAM was therefore not considered further for the role of delegated investment solutions provider.
Why was SEI selected?
After completing the scoring process and checking references, it was determined that SEI appeared to be the best fit for the Foundation at this time. SEI is a leading global provider of investment management solutions for foundations, endowments, corporations, healthcare organizations, unions, and other institutions. Approximately 38% of SEI’s client base is community foundations, and they work with more than 178 non-profits representing a variety of charitable causes.
Through SEI we will have access to investment consulting services with expertise to advise on industry best practises, innovations and multiple managers employing best-in-class investment strategies.
Why is the Foundation retaining an investment custodian?
All four delegated investment solution providers felt the Foundation would benefit from retaining its own custodian and suggested that retaining a custodian would be a best practice for an institutional investor of the Foundation’s size. Retaining a custodian will provide the Foundation with an independent book of record, will permit returns from multiple managers to be reconciled, consolidated, and reported and will relieve the Foundation’s small staff from having to do necessary, but additional, work to produce these reports.
Why was CIBC Mellon selected?
SEI recommended CIBC Mellon Trust (CMT) as custodian. CMT is a major supplier of asset custody services in Canada. SEI indicated a preference for CMT based on its past experience, and existing reporting links between the two firms. SEI also indicated they had a favoured fee arrangement with CMT which would reduce costs. And finally, SEI agreed to absorb the cost of CMT’s services from their consulting fee. The Foundation will not be paying extra fees but will benefit from the independent reporting services of CMT.
How could these changes impact my fund or investments with the Foundation?
Throughout the process outlined above, the Foundation was focused on the potential impacts on Donors and other Investment Stakeholders. The Foundation Board believes that these changes will improve the Foundation’s ability to serve Donors and other Investment Stakeholders and continue to meet their needs over the long term. Expected benefits include:
- Stronger investment governance;
- The acquisition of external consulting and custodial services at a similar cost to that previously paid for investment management only;
- Access to multiple, best-in-class, managers (currently not available through TDAM) thereby reducing manager specific risk within the investment portfolio;
- Improved investment reporting;
- Access to alternative asset classes not currently held in the Foundation’s investment portfolio, improving diversification, and slightly lowering expected risk;
- The potential for a slight improvement in expected risk adjusted long term returns. This expectation is not guaranteed but is suggested based on a detailed investment study produced by the consultant.
Who can I contact with questions or to obtain more information?
Contact CEO Carm Michalenko at firstname.lastname@example.org or 306-665-1768.