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Presented on September 27, 2006 by Michael H. Strauss,  Chief Economist and Chief Operating Officer of Commonfund Asset Ma...
Why Invest with Commonfund The Pillars That Support Our Mission To improve investment management practices and to enhance ...
A History of Innovation Commonfund has a History of Providing Programs Across a Broad Range of Asset Classes 1 Hedge strat...
Education and Best Practices <ul><li>Commonfund Benchmarks Study ®  Series </li></ul><ul><li>Endowment Institute </li></ul...
Asset Allocation for Total Institutions Dollar-weighted asset mix As of June 30, 2005 Copyright 2006 The Common Fund for N...
9.6%  Average Reported One-, Three- and Five-Year Returns 1 Annual Net Total Return % Fiscal Years 2000-2005 ending June 3...
Asset Allocation 1  Trend for Total Institutions Percent (%) 1   Dollar Weighted Copyright 2006 The Common Fund for Nonpro...
Is there a correlation between performance and liquidity?  Source: 2006 Commonfund Benchmarks Study® – Educational Endowme...
Internal and external forces effecting the Campus of the Future Intergenerational Equity “ The Trustees of an endowed inst...
Primary Issues in Investment Management <ul><ul><li>Asset allocation  is the key to successful investment management.  </l...
Historical Perspective Cumulative Inflation-Adjusted Performance Source:  Ibbotson, Bloomberg, Commonfund Institute The eq...
World Economic Growth  Source: SG Research, Global Economic Forecast, June 2006 -2 0 2 4 6 8 10 12 2002 2003 2004 2005 200...
U.S. Real GDP  (% yr/yr change) Source: BEA
World Inflation  Source: SG Research, Global Economic Forecast, June 2006 -2 0 2 4 6 8 10 12 14 16 18 2002 2003 2004 2005 ...
Employment Source: BLS
Housing Sector Weakening Source: ISI Group
Retail Sales and the Consumer Source: ISI Group Y/Y% Change Y/Y% Change Y/Y% Change Percent Change
Energy Prices Source: Bloomberg, EIA
Consumer Price Index Source: BLS
The Fear of the Three Bears
Important Notes for Private Programs This document is intended only for qualified, pre-existing investors in Commonfund Ca...
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Oklahoma State Regents

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  • VERNE In looking to meet the investment needs of nonprofits, we believe that we need to be a broad-based provider. That doesn’t mean that we will offer a fund for every strategy or to meet every need…rather, we will offer investment programs wherever we believe we can add value for our investors. We do not, as an example, offer index funds….we simply do not believe that we can provide incremental value to our investors who choose to index…so we actually closed our index funds a few years ago. Lyn and Sue will talk in more detail about our investment philosophy and process in a few minutes.
  • John Griswold In 1971 when the Ford Foundation made a grant of $2.8 million to create The Commonfund for Non-Profit Organizations -- $500,000 of that grant was restricted to research and publications designed to improve the overall state of endowment management… That initial grant seeded what is today a core part of Commonfund’s mission…and it is manifested in a broad range of programs – from research of the Commonfund Benchmarks Study to white papers, roundtables and seminars and opportunities for professional development in endowment management and treasury management. Jon and I will spend a few minutes highlighting some of these programs in a bit more detail…
  • Transcript of "Oklahoma State Regents"

    1. 1. Presented on September 27, 2006 by Michael H. Strauss, Chief Economist and Chief Operating Officer of Commonfund Asset Management Company Crissie L. Tewell, Managing Director Oklahoma State Regents IMPORTANT NOTE: All library material is in Commonfund’s standard look (Its corporate identity). Therefore, please do not change font styles or sizes on cover page. Also please do not add “th” or “rd” to the date (i.e. June 27 th , 2006). In addition entity names (i.e. Commonfund Securities, Inc.) should not be added to name and title. If it’s added it will be deleted (Note: exception President of Commonfund, President of CCI). Thank you for your cooperation. (Please delete this note after it’s read)
    2. 2. Why Invest with Commonfund The Pillars That Support Our Mission To improve investment management practices and to enhance the financial resources of the nonprofit community STRONG FINANCIAL RESOURCES SERVICE EDUCATIONAL PROGRAMS PERFORMANCE COMMONFUND MISSION
    3. 3. A History of Innovation Commonfund has a History of Providing Programs Across a Broad Range of Asset Classes 1 Hedge strategies first used as diversifier in Commonfund equity portfolio 2 Distressed debt first used as diversifier in Commonfund Multi-Strategy Bond Fund. 3 This service existed as the Endowment Planning Model since 1990. U.S. Equities 1971 Cash (Short Term Fund) 1974 Fixed Income 1976 Hedged Equity 1 1982 International Equities 1983 Real Estate 1988 Private Capital 1988 Distressed Debt 2 1989 Absolute Return Strategies 1991 Commonfund Strategic Solutions ® 2001 Allocation Planning Model TM 3 2002 Commodities 2005 Program Initiated
    4. 4. Education and Best Practices <ul><li>Commonfund Benchmarks Study ® Series </li></ul><ul><li>Endowment Institute </li></ul><ul><li>Regional Roundtables and Seminars </li></ul><ul><li>Publications and White Papers </li></ul><ul><li>Commonfund Forum Annual Conference </li></ul><ul><li>Treasury Institute for Higher Education </li></ul><ul><li>Higher Education Price Index (HEPI) </li></ul>A Commitment to Professional Development and the Sharing of Best Practices Commonfund Forum (Annual) Commonfund Investment Management & Governance Seminars (3 per Year) Commonfund Trustee Roundtable Series (Twice monthly on average)
    5. 5. Asset Allocation for Total Institutions Dollar-weighted asset mix As of June 30, 2005 Copyright 2006 The Common Fund for Nonprofit Organizations. All rights reserved. &quot;Commonfund&quot; and &quot;Commonfund Benchmarks Study&quot; are trademarks of The Common Fund for Nonprofit Organizations. No part of this material may be used without the express written permission of The Common Fund for Nonprofit Organizations. 2006 Commonfund Benchmarks Study® Educational Endowment Report Hot ChartsCFBenchmarks_Study_2006 Domestic Equities International Equities Fixed Income Alternative Investments Short Term/Cash
    6. 6. 9.6% Average Reported One-, Three- and Five-Year Returns 1 Annual Net Total Return % Fiscal Years 2000-2005 ending June 30 1 Net of fees. 729 Institutions Copyright 2006 The Common Fund for Nonprofit Organizations. All rights reserved. &quot;Commonfund&quot; and &quot;Commonfund Benchmarks Study&quot; are trademarks of The Common Fund for Nonprofit Organizations. No part of this material may be used without the express written permission of The Common Fund for Nonprofit Organizations. FY2005 total return 3-year return 5-year return 2006 Commonfund Benchmarks Study® Educational Endowment Report 3.5% Average return Hot ChartsCFBenchmarks_Study_2006
    7. 7. Asset Allocation 1 Trend for Total Institutions Percent (%) 1 Dollar Weighted Copyright 2006 The Common Fund for Nonprofit Organizations. All rights reserved. &quot;Commonfund&quot; and &quot;Commonfund Benchmarks Study&quot; are trademarks of The Common Fund for Nonprofit Organizations. No part of this material may be used without the express written permission of the Common Fund for Nonprofit Organizations. Fiscal Years 2000-2005 ending June 30 2006 Commonfund Benchmarks Study® Educational Endowment Report Hot ChartsCFBenchmarks_Study_2006 657 707 729 637 617 563 Total Institutions
    8. 8. Is there a correlation between performance and liquidity? Source: 2006 Commonfund Benchmarks Study® – Educational Endowment Report, Based on 729 institutions that provided asset allocation data  2006 The Common Fund for Nonprofit Organizations. All rights reserved. &quot;Commonfund&quot; and &quot;Commonfund Benchmarks Study&quot; are trademarks of The Common Fund for Nonprofit Organizations. No part of this material may be used without the express written permission of The Common Fund for Nonprofit Organizations. Source: 2005 NACUBO Endowment Study, the two smaller fund groupings as reported by NACUBO, $26M - $50 M and <$25M, are represented in the Commonfund $10 - $50M grouping equally weighted.
    9. 9. Internal and external forces effecting the Campus of the Future Intergenerational Equity “ The Trustees of an endowed institution are the guardians of the future against the claims of the present. Their task is to preserve equity among generations.” - James Tobin Yale University Population Demographics Technological Advances Global Competition Economic Shocks Education Competitiveness China-India Impact
    10. 10. Primary Issues in Investment Management <ul><ul><li>Asset allocation is the key to successful investment management. </li></ul></ul><ul><ul><li>Investments should grow to offset inflation . </li></ul></ul><ul><ul><li>Over long periods of time equities typically produce higher incremental returns than cash or bonds. </li></ul></ul><ul><ul><li>Diversification among asset classes and managers is a key to increase return and reduce volatility. </li></ul></ul><ul><ul><li>Access quality portfolio managers and monitor them on a regular basis for compliance with guidelines and performance measurement. </li></ul></ul><ul><ul><li>Conduct periodic asset allocation review . </li></ul></ul><ul><ul><li>Minimize costs . </li></ul></ul>Hot ChartsAsset AllocationPrimary_Issues_InvstMngmnt
    11. 11. Historical Perspective Cumulative Inflation-Adjusted Performance Source: Ibbotson, Bloomberg, Commonfund Institute The equity portion of the hypothetical portfolio is based on monthly returns of the S&P 500 Index (12/65-03/05), and the fixed income portion is based on monthly returns of the Lehman Brothers Aggregate Index (1/73-03/05) and the Ibbotson Associates Long Term Corporate Bond Index (12/65-12/72). HEPI data from 7/04 to 03/05 is replaced with CPI+1%. The hypothetical portfolio is rebalanced to 70/30 annually on 1/1/yy and 5% is distributed annually on 1/1/yy. CPI HEPI Consumer Price Index (CPI) versus Higher Education Price Index (HEPI) 12/31/05 $67.5 December 1965 – December 2005 / Consumer Price Index (CPI) versus Higher Education Price Index (HEPI) 12/31/05 $87.4 Hypothetical Portfolio (70% Equity/30% Fixed Income, 5% Spending) 12/31/99 $126.7 12/31/99 $105.6 7/30/82 $33.8 7/30/82 $33.2
    12. 12. World Economic Growth Source: SG Research, Global Economic Forecast, June 2006 -2 0 2 4 6 8 10 12 2002 2003 2004 2005 2006 2007 Percent (%) -2 0 2 4 6 8 10 12 2002 2003 2004 2005 2006 2007 Percent (%) World US Japan EU Emerging countries China Latin America Eastern Europe
    13. 13. U.S. Real GDP (% yr/yr change) Source: BEA
    14. 14. World Inflation Source: SG Research, Global Economic Forecast, June 2006 -2 0 2 4 6 8 10 12 14 16 18 2002 2003 2004 2005 2006 2007 Percent (%) World US Japan EU Emerging countries China Latin America Eastern Europe
    15. 15. Employment Source: BLS
    16. 16. Housing Sector Weakening Source: ISI Group
    17. 17. Retail Sales and the Consumer Source: ISI Group Y/Y% Change Y/Y% Change Y/Y% Change Percent Change
    18. 18. Energy Prices Source: Bloomberg, EIA
    19. 19. Consumer Price Index Source: BLS
    20. 20. The Fear of the Three Bears
    21. 21. Important Notes for Private Programs This document is intended only for qualified, pre-existing investors in Commonfund Capital, Commonfund Realty and Commonfund Asset Management Company programs, Members of The Common Fund For Nonprofit Organizations (“Commonfund”), or other eligible institutional investors approved by Commonfund Securities, Inc. It is not intended to constitute an offer to sell, nor the solicitation of an offer to buy, securities. Any such offerings will be made only by means of information memoranda and related subscription documents that will be made available by Commonfund Securities, Inc. (a broker-dealer affiliate of Commonfund Capital, Commonfund Realty and Commonfund Asset Management Company) only at the time an offering is in progress and only to investors qualified and eligible to invest. Important Information About Procedures for Opening a New Account : To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each customer who opens an account. What this means for you: When you open an account, we may ask for documents or information related to: your principal place of business, local office or other physical location; taxpayer identification number; and other documents demonstrating your lawful existence such as certified articles of incorporation, a government-issued business license, a partnership agreement, or a trust instrument, and other identifying documents.
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