OUR THOUGHTS ON:

How Well Is Your Investment Portfolio Performing?

Not-for-Profit

By Doug Morally

A recent article published in Fortune magazine revealed that the University of California has committed more than $8 billion to approximately 200 private equity and venture capital funds; however, the school doesn’t know how any of these investments are doing. The most recent data provided by the school relative to its alternative investment portfolio is from September 2012.

In the wake of the downturn in the economy in 2009, many non-profit organizations turned to alternative investments in an effort to increase returns for their investment portfolios. Alternative investments include partnerships, hedge funds, managed futures, real estate, commodities and derivatives contracts. These types of investments can be difficult to value because of their complex nature and relative lack of liquidity.

The performance results of many alternative investments typically lag by a quarter or more, creating difficulties in managing the overall financial health and performance of an organization’s investment portfolio.

As your management team and investment committees review quarterly and year-end investment statements, take the time to make sure your organization understands the impact that timely reporting of alternative investments performance, future capital calls and the lack of liquidity can have on future business decisions.

© 2013 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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