Data & Research September 22, 2011

Nonprofits Increase Diversification to Manage Market Volatility

An SEI Quick Poll reveals nonprofits are adding new asset classes to portfolios in an effort to protect themselves against ongoing investment volatility.
Reported by

Nearly three-quarters (73%) said diversification was the risk management measure they have already taken, followed by 40% who said they have increased allocations to inflation protection strategies, such as TIPS (Treasury Inflation Protection Strategies) and commodities.  Results also showed that while half of the nonprofits polled have less than 10% of the portfolio in illiquid investments, nearly a third (29%) have 21% or more of the portfolio invested in illiquid assets. 

The most popular alternative investments currently used are private equity and funds of hedge funds, as more than half (55%) of all respondents indicated they were investing in each. Commodities (44%) and private real estate (40%) ranked second and third. When asked which alternatives they are considering investing in this year, more than one in 10 (11%) ranked private equity and commodities the highest.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

“Over the past year, nonprofits have been turning to risk management measures as a way to protect their portfolios from the continuing market turbulence,” said Chris LaMarca, Nonprofit and Healthcare Investment Director for SEI’s Institutional Group. “But no single technique is a quick fix. Uncertainty regarding how to best support spending policies and how to offset the impact of inflation are just a couple of concerns that support the increased interest in outsourcing. Investment management is becoming increasingly complex and nonprofits are recognizing the need for expanded resources and expertise.”

The majority of poll participants (59%) reported that when a change to their investment management approach is next considered, their organization will evaluate an "outsourced approach"—defined as an implemented consultant, outsourced-CIO, or a fiduciary management model. Only one in six (16%) respondents managing endowments said their investment committee would ever consider managing their portfolio internally, without any outside support.

The poll was completed by 135 U.S. nonprofit executives and investment committee members responsible for overseeing endowments and foundations ranging in size from $25 million to more than $1 billion. None of the respondents were institutional clients of SEI.

For a copy of the complete survey results, e-mail seiresearch@seic.com.

Deals & People September 22, 2011

linkedFA Hires EVP to Help Educate Advisers

linkedFA, a social networking site for financial professionals, has hired Eric Levine as its Executive Vice President of National Sales. 
Reported by

Levine joins linkedFA from Investacorp Inc., where he was the Due-Diligence Officer and Director of Business Development.

In his new role, Levine will be responsible for working to educate financial professionals about the business benefits of social media and technology solutions, while spreading awareness of how linkedFA can help.  He will also spearhead sales initiatives and educational events driven by innovators in the financial services industry.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

linkedFA co-founder, Stephen Prosser, states: “We are extremely excited to have Eric on the linkedFA team. While many enterprises and financial institutions still struggle to find an appropriate social media solution for their advisers, Eric is poised to provide industry leaders with the education and training necessary to approve and maximize linkedFA usage.”

«