Charities are at the very core of Evercore Pan-Asset’s client base. We are proud of our specialist investment service dedicated to managing assets or endowments for non-profit organisations.
We recognise that the overriding concern for Trustees is the duty of care when overseeing the investments of a charity. It is vital to ensure that the charity assets are secure, invested in line with the objects of the charity, meeting both the short-term commitments as well as longer-term aspirations.
The key to ensuring that the charity’s investment returns meet or exceed Trustees’ expectations comes from asset allocation. Studies show that most of the positive returns from a portfolio of investments come from the big decision on how much to have in cash, bonds, shares, property and other assets. Sadly, many charity investment managers constrain themselves to a fixed asset allocation or spend most of their time choosing the difference between company shares. In certain cases, charities’ investments end up being based on solutions more suitable for pension funds, which may make up the bulk of large investment managers’ assets, but have different risk and return requirements to charities.
Previous legislation made a clear distinction between capital and income and many Trustees continue to focus on these elements. It concerns us that too much focus on either component will increase the overall risk the charity will face over time. While certain permanent endowments maintain the separation of capital and income, the Charities Act 2006 removed this requirement allowing Trustees to concentrate on maximising total returns
We place asset allocation at the heart of our investment process. We select assets that are suitable and appropriate for each charity, given their objectives, appreciating the Trustees’ duty of care. Our overriding aim is to keep things simple and avoid risks Trustees do not need to take.
