The relationship between a charity’s governance and investment is vital. Evercore Pan-Asset was set up to address the needs of charity Trustees. All too often, charities have been offered an investment solution that does not match their risk appetite or spending plans. We place particular emphasis on this relationship, which is based on our own experiences as Trustees of charities or from sitting on endowment Investment Committees.
In setting an appropriate asset allocation for a charity, we take into account future economic and market prospects, the likely spending plans of the charity and the legislation that governs how charities can manage their investments. We adhere to the principles within the Trustee Act 2000 and apply the advice of the Charity Commission’s Guidance Note 14, surrounding the general power of investment bestowed to Trustees.
Given Trustee’s duty of care towards a charities’ assets, we understand that it is a very difficult decision to select an appropriate investment advisor and to delegate the responsibly for the management of those assets. This is why we established Evercore Pan-Asset, to help Trustees develop an appropriate asset strategy to fulfil their charities’ objectives. The flexibility of our smaller business size allows for this.
While larger investment managers have many resources at their disposal, they are not necessarily allocated to their charity clients who will often comprise only a minority of the assets managed by that firm. Larger investment managers may therefore often lack the flexibility to offer a truly bespoke service to charity Trustees or assist them in developing a suitable investment strategy. Many ‘off the shelf’ investment solutions can be dressed up to appear tailor-made for charities but may not exactly match the Trustees’ expectations. Smaller investment boutiques can be far more nimble in meeting Trustees’ needs of preserving capital, providing a sustainable income and growth for the future.
All too often the investment manager periodically meets the charity at the end of a long Trustees’ meeting, where they have made important decisions on the management of the charity. Time is short and the manager will tend to report on the past with some reference to future prospects. We do not think this best serves the Trustees’ need for good governance. In order for a closer alliance between the future financial needs of the charity, be it short term cash or with longer term real assets, we would work closely with the staff and Trustees to develop an appropriate investment strategy and ensure that it remained appropriate in changing circumstances and market conditions. We would spend more time to ensure that we have a full understanding of the charity and in return, Trustees are offered a complete understanding of likely future risks and returns. As a result, each person can have confidence that the investment strategy is likely to match the charity’s objectives.
