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Returns of foundations plunge in FY2011, says Commonfund
Source: Pensions & Investments  ·  June 25, 2012  ·  Excerpt

Foundations had an average return of -0.9% in fiscal 2011, while operating charities returned an average -1.8%, according to two Commonfund Institute studies.

In fiscal 2010, foundations returned an average 12.5%; charities, 11.6%.

According to a report on the studies issued Monday, the best-performing asset classes among foundations were venture capital, 14.2%; private equity real estate (non-campus), 9.2%; and private equity (LBOs, mezzanine, M&A funds and international private equity), 8.9%.

Among operating charities, private equity real estate (non-campus) led the way with a one-year return of 7.8%, followed by fixed income at 5.2% and distressed debt at 2.9%.

The average asset allocation among foundations as of Dec. 31 was 43% alternative strategies, 24% domestic equities, 13% fixed income, 12% international equities and 8% short-term securities/cash others.

Among operating charities, the average allocation was 28% alternative strategies, 25% domestic equities, 22% fixed income, 16% international equities and 9% short-term securities/cash/other.

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Our take
Where is your organization's money invested, and how do you monitor the returns on those investments? The possibilities are nearly endless, and at Compass Pointe we consider it a priority to determine the best formula for your organization's long-term financial security.

Investment strategy, tax relief and diversification are only a few of the areas we can help you address moving forward. Contact us now for answers to these and other questions:

  • How are other similar nonprofits in my region or industry managing debt, and allocating their investments? What relevant standards and best practices are available?
  • What analysis can be provided of my organization's current investment picture? What is being done well, and where do the biggest opportunities lie?


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