Cornerstone utilizes the asset allocation model derived from the policy to determine required asset class exposure and then selects investment vehicles to facilitate the requisite exposure.
Portfolio Monitoring and Reporting
Following the implementation decision, comprehensive monitoring and reporting are required for proper fiduciary oversight. Cornerstone Management’s portfolio management and rebalancing systems allow our team to track all transactions inside our clients’ portfolios and monitor policy adherence daily. Further, our quarterly reporting is designed to allow Investment Committees and Boards to swiftly confirm if the portfolio is in compliance with policy guidelines, if fees are in line with market norms, if spending parameters are being followed, and if it is in adherence with UPMIFA.
Portfolio Monitoring and Reporting
Following the implementation decision, comprehensive monitoring and reporting are required for proper fiduciary oversight. Cornerstone Management’s portfolio management and rebalancing systems allow us to track every transaction inside our clients’ portfolios and to monitor policy adherence on a daily basis. Further, our quarterly reporting is designed to allow Investment Committees and Boards to quickly ascertain if the portfolio is in compliance with policy guidelines, and in adherence with UPMIFA, if fees are in line with market norms, and spending parameters are being followed.
Our Asset Management Consulting Process
As a nonprofit asset management consulting firm, the bulk of our team's advice is focused on strategic asset allocation consulting. We are not market timers, and we do not have an extremely active tactical approach. However, our investment committee regularly reviews the macroeconomic outlook and will make minor decisions to tactically overweight or underweight a particular strategy or asset class for the strategic allocation.
Our Asset Management Consulting Process
As an asset management consulting firm, the bulk of Cornerstone’s advice is focused on strategic allocation issues. We are not market timers, and we do not have an extremely active tactical approach. However, our investment committee regularly reviews the macroeconomic outlook and will make minor decisions to tactically overweight or underweight a particular asset class or strategy relative to the strategic allocation.
Careful Portfolio Construction
A significant element of our nonprofit asset management consulting process is related to portfolio construction. Our process focuses on risk/reward analysis and begins with running an unconstrained mean-variance optimization program. Our team normally utilizes Morningstar Direct/Ibbotson software for this portion of the analysis. Historic data may be pulled from multiple sources into these software “engines.” Ultimately, our team overlays constraints on the optimization program related to our historic experience as a nonprofit asset management consulting firm, cash flow requirements, and forward-looking macroeconomic expectations.
Careful Portfolio Construction
As noted above, a significant element of our asset management consulting process is related to portfolio construction. Our process focuses on risk/reward analysis and begins with running an unconstrained mean variance optimization program. We normally utilize Morningstar Direct/Ibbotson software for this portion of the analysis. Historic data may be pulled from multiple sources into these software “engines.” Ultimately, we overlay constraints on the optimization program related to our historic experience as an asset management consulting firm, cash flow requirements, and forward looking macro expectations. Following the construction of an asset allocation model for the portfolio, we proceed to implementation.
Selecting Implementation Vehicles for Non-Profit Portfolio Management Clients
As a part of the asset management consulting process, our team selects implementation vehicles for our nonprofit portfolio management clients. We review a manager’s strategy and selection methodology with the manager’s representative to receive key insights into the manager’s process and holdings. This review serves as an initial guide. Next, we determine the manager’s peer group and benchmark as classified by major research services such as Morningstar. Following our review of these external factors, we conduct an internal analysis. This analysis includes capitalization, geography, a classification of the manager’s holdings based on style (growth/value), and key selection factors and attributes. To monitor style consistency, our team tracks the manager’s performance against its benchmark and its peer group. Our team also conducts holding-based analysis to help support our viewpoint and to better understand the manager’s selection methodology.
Selecting Implementation Vehicles for Non-Profit Portfolio Management Clients
As part of the asset management consulting process, we select implementation vehicles for our non-proft portfolio management clients. We review a manager’s strategy and selection methodology with the manager’s representative to receive key insights into the manager’s process and holdings. This review serves as an initial guide. Next, we determine the manager’s peer group and benchmark as classified by major research services such as Morningstar. Following our review of these external factors, we conduct analysis internally. This analysis includes a classification of the manager’s holdings based on style (growth/value), capitalization, geography, and key selection factors/attributes. To monitor style consistency, we track the manager’s performance against its benchmark and its peer group. We also conduct holdings-based analysis to help support our viewpoint and to better understand the manager’s selection methodology.
Enhancing Organizational Stewardship
Cornerstone comes alongside nonprofit portfolio management clients to address fiduciary risk and seeks to enhance organizational stewardship. Enhancing organizational stewardship is a key component of Cornerstone’s asset management consulting process. To help enhance stewardship and the fulfillment of fiduciary obligations, Cornerstone helps clients address fiduciary risks in three key areas: endowment spending rate, investment policy, and comprehensive fiduciary oversight. In regards to investment policy, acknowledging UPMIFA law and having sound policy helps manage relevant risks. Regarding spending rates, Cornerstone helps nonprofit portfolio management clients establish and maintain appropriate endowment spending rates to protect long-term capital, given market conditions and organizational objectives. Lastly, in regards to comprehensive fiduciary oversight, Cornerstone structures board and/or investment committee reporting and consulting around meeting the objectives of sound fiduciary oversight.
Enhancing Organizational Stewardship
Cornerstone comes alongside nonprofit portfolio management clients to address fiduciary risk and seeks to enhance organizational stewardship. Enhancing organizational stewardship is a key component of Cornerstone’s asset management consulting process. To help enhance stewardship and the fulfillment of fiduciary obligations, Cornerstone helps clients address fiduciary risks in three key areas: endowment spending rate, investment policy, and comprehensive fiduciary oversight. In regards to investment policy, acknowledging UPMIFA law and having sound policy helps manage relevant risks. Regarding spending rates, Cornerstone helps nonprofit portfolio management clients establish and maintain appropriate endowment spending rates to protect long-term capital, given market conditions and organizational objectives. Lastly, in regards to comprehensive fiduciary oversight, Cornerstone structures board and/or investment committee reporting and consulting around meeting the objectives of sound fiduciary oversight.
Whatever your financial need, Cornerstone Management is a team of professionals who will help your organization grow and thrive.