Asset Management Consulting

Our asset management consulting process begins with a review and analysis of the existing investment policy. This analysis may lead to revision or restatement, because we view the investment policy as an integral building block for the investment fiduciary. The policy statement should clearly outline the appropriate objectives and constraints affecting the various investment portfolios and should ultimately provide an asset allocation model for implementation.

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

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.

portfolio-monitoring-and-reporting

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 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.

asset-management-consulting-process
asset-management-consulting-process

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-consideration

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.

careful-portfolio-consideration

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 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.

selecting-implementation-vehicles
selecting-implementation-vehicles

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-stewardship

Enhancing Organizational Stewardship

Cornerstone comes along-side non-profit 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: investment policy, endowment spending rate, and comprehensive fiduciary oversight. Regarding investment policy, acknowledging UPMIFA law and having sound policy helps manage relevant risks. Regarding spending rates, Cornerstone helps non-profit portfolio management clients establish and maintain appropriate endowment spending rates to protect long-term capital, given market conditions and organizational objectives. Lastly, Cornerstone structures board and/or investment committee reporting and consulting around meeting the objectives of sound fiduciary oversight.

enhancing-stewardship

Enhancing Organizational Stewardship

Cornerstone comes along-side non-profit 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: investment policy, endowment spending rate, and comprehensive fiduciary oversight. Regarding investment policy, acknowledging UPMIFA law and having sound policy helps manage relevant risks. Regarding spending rates, Cornerstone helps non-profit portfolio management clients establish and maintain appropriate endowment spending rates to protect long-term capital, given market conditions and organizational objectives. Lastly, 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.