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I Investment Mgmt

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Moye, Investment Management, Conservation Trust funds

Moye, Investment Management, Conservation Trust funds

Published in: Economy & Finance, Business

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  • 1. Investment Management Basic Training on Conservation Trust Funds Cape Town, South Africa March 31 – April 2, 2009
  • 2. “The true objective of any long-term investor is maximum total real return after taxes.” Sir John Templeton
  • 3. A Successful Investor… establishes realistic long-term goals manages risk through asset allocation is unemotional in the decision-making process selects investment vehicles carefully continuously monitors performance ensures minimal transaction costs can change managers at little to no expense
  • 4. Investment Management Strategy diversified asset base flexible spending policy regular evaluation and modification rebalancing of asset allocation environmental screening
  • 5. Income Spending Formula Spending Policy Income/Spending Expected Annual Rate Total Return 9% Gifts +2% Spending Rule -5% Admin Expense -1% Inflation -3% = Real Growth +2%
  • 6. CTFs allocate assets by: type – fixed income, equity, cash, and other geography – US, domestic, and international currency – domestic , US, EU, and other
  • 7. CTF’s Investment Performance depends on: size and period of operations amount of invested assets and ROI asset and currency allocation ROI criteria investment advisors investment restrictions benchmark performance
  • 8. Case Study: The Eastern Arc Mountain Fund Steady Stream of Income Strategy “Accrual” period until end of 2008 Heavier stock portfolio during accrual phase Entered into an “income” phase in 2009 Declining equity portion during income phase
  • 9. Case Study: Ecuador National Environment Fund $23 million endowment Invests in US and national markets Reviews investment portfolio regularly Financial crisis had no impact on PA spending
  • 10. To sum up… Best practice in investment management Establish clear investment guidelines Form investment committees Hire outside professional advisors
  • 11. Questions??? How well are CTFs generally performing? Why is a well-defined spending policy so important?