Endowment & Foundation Management

Helping you balance short-term demands with long-term objectives

An investment advisory relationship to help you create lasting success

Our investment process begins with you and your organization. First, we spend time understanding your organization’s unique circumstances – including your mission, funding considerations, and spending needs – priorities, and short- and long-term risk and return goals. Then, we design an investment plan that seeks to meet your spending needs and preserve your portfolio’s long-term purchasing power.

Our approach to investing for endowments and foundations combines our bottom-up emphasis on capital preservation and growth with additional attention paid to outperforming in down markets. We augment our investment offering with additional solutions to enhance the management and operations of an institution so you can thrive.

 

Our executives are owner-operators who manage clients’ investments as if they were their own, because they are. This creates a unique investment culture and distinct alignment of interests with our clients. As an investor who has stewarded our own institution for over 200 years, our unique perspective can help you achieve your goals over long time horizons.

Solutions to help achieve your short- and long-term objectives

  • Investment Advisory

    Long-term, value-oriented investing focused on preserving and growing your capital

  • Spending Rate Analysis

    Guidance establishing the appropriate spending policy

  • Investment Policy Statement

    Advice on the creation or review of your investment policy statement 

  • Trust Services

    Trustee and executor services that provide continuity while easing administrative burden

  • Strategy, Operating, and Fundraising Advisory

    Objective advice to help you achieve your organization’s goals

  • Lending

    Flexible, secured lending to help you implement strategies to achieve your objectives1

Setting an Asset Allocation for Endowments and Foundations

BBH Partner Suzanne Brenner and Deputy Chief Investment Officer Ilene Spitzer discuss special considerations to take into account when setting an asset allocation for endowments and foundations.
Read More

How We Construct Endowment and Foundation Portfolios

BBH’s policy portfolio for endowments and foundations combines our bottom-up emphasis on capital preservation and growth with additional attention paid to outperforming in down markets. The driving principles behind the portfolio are as follows:

This table shows our driving principles behind endowment and foundation portfolios, including an equity bias, adequate liquidity, prudent leverage, downside protection and active rebalancing.
Equity Bias
 Adequate Liquidity
 Prudent Leverage
 Risk Management Active Rebalancing
We view an equity bias as necessary to ensure spending needs can be met on an annual basis while preserving the portfolio’s purchasing power.
 We believe endowment and foundation portfolios must have adequate liquidity to ensure spending needs can be met.
 We do not believe that leverage is necessary to generate strong long-term returns; when used, we believe it should be modest. We believe strategies and assets that bear less correlation to the wider markets or behave in a countercyclical manner can add practical value to endowment and foundation portfolios.
 We believe that tax-exempt portfolios should be rebalanced to model when actual allocations are outside of target ranges.

BBH Partners and senior executives have deep experience creating financial solutions for tax-exempt organizations and acting in a fiduciary capacity as nonprofit board members, enabling us to best serve our endowment and foundation clients.
Justin Reed Partner and Chief Investment Officer

Understanding Your Investment Objectives and the Risk-Return Trade-off

Your organization’s purpose is twofold: providing stable support for operations while maintaining long-term purchasing power. This requires delicately balancing your risk and return goals. When establishing your organization’s portfolio, we begin by understanding the following in order to identify the appropriate equity and fixed income allocations:

Read Infographic Text Version

This image shows our approach to managing the risk-return tradeoff for endowments and foundations. We take the following factors into consideration:

  • Portfolio spending rate and methodology
  • Flexibility of annual spending
  • Return targets
  • Investment horizon
  • Liquidity needs (for lumpy capital spending)
  • Tolerance for illiquidity in pursuit of higher returns
  • Tolerance for portfolio drawdowns
  • Open or closed pool
  • Availability or access to other funds for spending (e.g., other income sources, credit line)

After looking at this we work with you to determine an acceptable trade-off between risk and expected returns and help you think through changes to strategic plans, spending rates or portfolio objectives that may address shortfall risk.

Sustainable Investing and ESG

We have found that many seek to incorporate their core values in their investment portfolio. Interested in our approach to sustainable investing and how we align your portfolio with your values?

Learn more here

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Contact Us

1 Borrowed funds cannot be used to purchase securities in the portfolio.

This communication is for informational purposes only.  The information herein has not been based on a consideration of any individual investor’s circumstances and is not investment advice, nor should it be construed in any way as tax, accounting, legal or regulatory advice.  Individuals should consult their personal tax, accounting and legal advisers regarding any potential investment or strategy.  Any views and opinions are subject to change at any time.

This material does not constitute an offer or solicitation in any jurisdiction where or to any person to whom it would be unauthorized to do so.

Investment Advisory Products and Services:

NOT FDIC INSURED   NO BANK GUARANTEE    MAY LOSE VALUE

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Important Information for Non-U.S. Residents

You are required to read the following important information, which, in conjunction with the Terms and Conditions, governs your use of this website. Your use of this website and its contents constitute your acceptance of this information and those Terms and Conditions. If you do not agree with this information and the Terms and Conditions, you should immediately cease use of this website. The contents of this website have not been prepared for the benefit of investors outside of the United States. This website is not intended as a solicitation of the purchase or sale of any security or other financial instrument or any investment management services for any investor who resides in a jurisdiction other than the United States1. As a general matter, Brown Brothers Harriman & Co. and its subsidiaries (“BBH”) is not licensed or registered to solicit prospective investors and offer investment advisory services in jurisdictions outside of the United States. The information on this website is not intended to be distributed to, directed at or used by any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. Persons in respect of whom such prohibitions apply must not access the website.  Under certain circumstances, BBH may provide services to investors located outside of the United States in accordance with applicable law. The conditions under which such services may be provided will be analyzed on a case-by-case basis by BBH. BBH will only accept investors from such jurisdictions or countries where it has made a determination that such an arrangement or relationship is permissible under the laws of that jurisdiction or country. The existence of this website is not intended to be a substitute for the type of analysis described above and is not intended as a solicitation of or recommendation to any prospective investor, including those located outside of the United States. Certain BBH products or services may not be available in certain jurisdictions. By choosing to access this website from any location other than the United States, you accept full responsibility for compliance with all local laws. The website contains content that has been obtained from sources that BBH believes to be reliable as of the date presented; however, BBH cannot guarantee the accuracy of such content, assure its completeness, or warrant that such information will not be changed. The content contained herein is current as of the date of issuance and is subject to change without notice. The website’s content does not constitute investment advice and should not be used as the basis for any investment decision. There is no guarantee that any investment objectives, expectations, targets described in this website or the  performance or profitability of any investment will be achieved. You understand that investing in securities and other financial instruments involves risks that may affect the value of the securities and may result in losses, including the potential loss of the principal invested, and you assume and are able to bear all such risks.  In no event shall BBH or any other affiliated party be liable for any direct, incidental, special, consequential, indirect, lost profits, loss of business or data, or punitive damages arising out of your use of this website. By clicking accept, you confirm that you accept  to the above Important Information along with Terms and Conditions.

 
1BBH sponsors UCITS Funds registered in Luxembourg, in certain jurisdictions. For information on those funds, please see bbhluxembourgfunds.com



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