Insights on Endowment and Foundation Investing
Managing Director Brian Crawford recently sat down with Privcap, a media company serving participants in the global private capital markets, to share Colonial’s insights about investing for foundations and endowments and considerations for investing in private capital. During the interview, Mr. Crawford discussed Colonial’s approach and how its unique characteristics help distinguish it from other firms to provide in-depth investment advisory services so that its clients meet their financial objectives and achieve their missions. Tom Franco, partner at Clayton, Dubilier & Rice, and Dan Federer, Managing Director of Washington University Investment Management Company (WUIMC) conducted the interview at Privcap’s Studio in New York City. The session is part of a ongoing series of editorial programs and interviews with thought leaders from the foundation and endowment world.
During the interview, Mr. Crawford opened with an overview of Colonial and its focus on foundations and endowments. He highlighted how managing a foundation or endowment differs from other institutions and pointed out one of the firm’s key strengths, “We are subdivided by analyst and consultant, so the consultants are actually part of our research team as well and are out there doing due diligence, meeting with managers, and hopefully to the end benefiting the foundations and endowments that we work with.” “Every one of our portfolios, our client relationships, are customized, so we have no models, no templates, etc., and it leads to a lot of different portfolios and a lot of different discussions”, Mr. Crawford continued.
Mr. Crawford also discussed risk and traditional models of looking at volatility in a portfolio and how Colonial’s considerations run much deeper, “Risk, in our view, is so much more than that. That’s risk of losing assets, risk of not meeting those spending needs that I talked about before — just any type of possible damage to those long-term goals is a risk to us.”
Continuing with the conversation about private markets, Mr. Franco brought up private equity investing and considerations for foundations and endowments. “We view private equity not as an investment but as a program, meaning we want to understand what we want to allocate to, how we’re going to size our positions, how we maintain vintage-year diversification over years and develop that seasoned portfolio, before we ever talk about a specific investment,” explained Mr. Crawford. “I think, as a consultant or an adviser, the worst thing I can do is get excited about a name I met last month or two months ago, present it to my client, and then two months later find another great name and present that to the client. We need to have a discipline and a program first.”
A video of the complete interview and full transcript can be obtained at Privcap’s web site at http://www.privcap.com/colonial-consulting-endowment-investing.