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How to Go All-in: Investing Full Portfolios toward Environmental and Social
Benefits
Dr. Robert E JohnsonBecker College@BeckerPrez
The Path to 100% Impact in Becker College Endowment
ü Q1-2016: Commit to 100% Impact Goal in the Becker Endowment -BOARD APPROVAL of IPS Addendum
ü Q2-2016: Inform HIP-rate Fund Managers on their Impacts:q Both existing and prospective fund managers by June 30q Signal that positive impact is criteria for ongoing investment
ü Q3-2016: Analyze Potential Changes in Fund Managersq Calculate the HIP impact ratings and risk-adjusted returns of possible new %
and $ allocations – including timelineq Evaluate funds on impact ratings and possible customizations/SMAs
q Q4-2016: Begin Migration to Funds & Strategies for 100% Impactq Approve portfolio changes (adds, drops, and customizations)q New fund managers and existing fund managers with shift to higher impact
q 2017: Measure Quarterly Progress towards 100% Impact Goals q Fund managers to engage investees on impact more methodically
2CONFIDENTIAL © 2006-2016 HIP Investor Inc.
3
Impact Metric Goals in theNew IPS
Current 2016(Excl. Hedge Funds)
Proposed 2016(No Hedge Funds)
1) IMPACT: Absolute HIP Rating (weighted-average) 50%+ 47% 52%
Net Positive
2) IMPACT: Relative HIP Rating(weighted-average vs. industry peers)
75%+ 68% 75%Top Quartile
3) RISK-ADJUSTED RETURNS:• Annual 5-yr Volatility• Annual 5-yr Returns• Sharpe Ratio
Growth60-20-20
allocation
9.9%11.5%1.09
9.7%11.2%1.15
4) FEES (weighted-average of funds/SMAs) Reasonable 0.84% 0.53%
CONFIDENTIAL © 2006-2016 HIP Investor Inc.
What is Important about Investing?
FUTURERISK
+UPSIDE
4CONFIDENTIAL © 2006-2016 HIP Investor Inc.
84% of Market Value = Intangible
5CONFIDENTIAL © 2006-2016 HIP Investor Inc.
HIP’s Rating Measures Impact, Drivers of Future Risk, and Potential Returns
6CONFIDENTIAL © 2006-2016 HIP Investor Inc.
HIP’s Rating Helps Investors
7CONFIDENTIAL © 2006-2016 HIP Investor Inc.
HIP’s Rating Serves Investors
8CONFIDENTIAL © 2006-2016 HIP Investor Inc.
CONFIDENTIAL © 2006-2016 HIP Investor Inc. 9
Be More HIPR. Paul Herman,
CEO & [email protected]
1-415-902-7741
@HIPinvestor
Fabian Willskytt,
Vice President
Joy P. Poland,
Advisor
1-401-714-7123
10