Customized Solutions for Foundations & Endowments
Highland’s modeling platform allows us to tailor solutions to the unique challenges of foundations and endowments. Each circumstance is unique: donor profiles, liabilities and spending policies all differ, as do liquidity constraints and existing commitments. Our goal is to help clients meet near-term spending goals, defend against downside risk, and preserve long-term purchasing power against inflation.
Results Oriented and Cost Conscious
At Highland, we recognize that foundation and endowment investing can be particularly difficult due to conflicting demands on sponsoring institutions: meeting current spending needs, while preserving enough capital to maintain long-term spending requirements well into the future. Our focus is on achieving both long-term positive performance and any co-existing investment objectives. Our foundation and endowment consultants will work with you to tailor your portfolio cost-effectively, accounting for fees and expenses, and also less apparent, intangible costs as well.
Tailored Portfolios and Modeling Capabilities
We help nonprofit clients create customized portfolios to meet their strategic objectives. Over the years, Highland has invested heavily in our modeling capabilities. Our proprietary systems allow us to simulate and address the impact of multiple considerations:
- Projected spending and spending scenarios
- Operational / budgetary concerns
- Liquidity risk and risk management
- Projected capital development and scenario analysis around capital campaigns
Our modeling helps clients understand the various tradeoffs and competing objectives of current spending versus the preservation of long-term purchasing power.
Continuum of Services
Highland’s engagement is customized to client requirements. Some investors have their own dedicated staff. Others are governed by a committee of volunteers. We offer a continuum of services from traditional consulting to delegated implementation. Our comprehensive retainer services include “extension of staff” responsibilities. Highland regularly facilitates clients’ operational duties such as rebalancing, review of subscription documents, liaising with auditors, and other day-to-day management activities.
Education and Stakeholder Communications
Foundations and endowments have a number of unique stakeholder challenges. Student bodies, grant recipients, large donors, investment committees and boards all have differing levels of familiarity and expertise. Clients view Highland as a partner, helping communicate with and engage various types of stakeholders. Highland also provides committees, boards and other groups with a variety of topical investment-related educational materials as part of our ongoing retainer services.
Environmental, Social and Governance (ESG)
Clients often have specific organizational goals or philosophies they wish to incorporate into their portfolios. Our involvement and ESG consulting services take various forms depending your goals. Some clients have actively undertaken divestment and we have helped them frame policy and implement a divestment program accordingly. Highland has helped others take more active engagement approaches, and others have implemented discrete related investment programs with our help.
Alternatives Research and Operational Due Diligence
Highland consults on a comprehensive array of alternative strategies which include but are not limited to strategies in the following markets:
- Traditional hedge fund strategies: arbitrage, long short, relative value, macro
- Private equity, real estate and debt
- Commodities and natural resources
- Direct Lending
- Life Settlements
Highland also advises on more niche strategies. These strategies tend to be more capacity constrained, with far fewer professional asset managers offering funds targeting niche markets. Fewer managers are less able to accept larger allocations. Accordingly, these strategies are typically below the radar and investability thresholds of the largest institutions. Research coverage of the strategies is less comprehensive in our industry because of the thresholds, and yet, these strategies have the potential to provide return enhancement and diversification benefits surpassing mainstream options.
Our analysts’ research efforts and travel are global in nature. Operational due diligence is an integral aspect of our research process. Safeguarding our clients’ assets from fraud or misappropriation is a central part of our research mission.
From our founding in 1993, we have insisted on full transparency with managers. Our organizational structure is helpful in this regard. Understandably, managers can be reticent to share position data with organizations that may compete with them, such as with broker-dealers who have their own trading functions. As part of our conflict-free structure, we have no allegiance except to our clients. We have earned a strong reputation for safeguarding sensitive data that managers have entrusted to us and our clients.
Highland provides clients with timely and accurate measurement of the total and individual investment categories. Performance measurement reports meet GIPS and consulting industry standards to effectively measure performance and communicate clearly with stakeholders. Highland maintains access to a broad dataset of peer group foundations and endowments. Our data and reporting services allow clients to compare allocations and performance to various customized peer groups on an ongoing basis.