Background
A $50 million foundation supporting a midwestern higher education institution partnered with North Pier to lead a comprehensive evaluation and search for a new investment advisor. Several significant changes motivated the foundation to engage an independent third-party firm.
A recent transformational gift necessitated a more institutionalized investment process, while significant leadership transitions—including a new CFO and Executive Director—prompted a reassessment of the foundation’s investment approach. Additionally, turnover within the investment committee underscored the urgency to explore outsourcing investment management for the first time. Historically, the foundation’s assets were managed collaboratively by a committee member who was stepping down from that role and an advisor at a major Wall Street firm.
With North Pier’s guidance, the foundation is navigating these changes, ensuring its investment strategy aligns with its evolving needs and mission.
Process & Findings.
Phase One: Education & Discovery
North Pier initiated the process with comprehensive education for the foundation’s staff and investment committee, recognizing that outsourcing investment management would mark a significant operational shift. This phase was designed to thoroughly explore the implications of such a transition while balancing the foundation’s desire for external expertise with its commitment to maintaining strong ties with the local community. North Pier also conducted one-on-one interviews with key staff members and committee participants, ensuring a clear understanding of their priorities, concerns, and vision for the foundation’s financial future.
By combining education with a client focused qualitative analysis, North Pier set the stage for informed decision-making, fostering alignment among stakeholders as the foundation embarked on this transformational journey.
Phase Two: RFP/Search
Building on the insights from the discovery phase, North Pier launched a targeted Request for Proposal (RFP) process designed to align with the foundation’s unique objectives. The RFP included six carefully selected candidates, including the incumbent provider, and was tailored to address the foundation’s priorities. Respondents were asked to provide sample portfolios, detailed recommendations for both short- and long-term asset allocations, and strategies for integrating alternative investments. The process also involved a deep dive into the candidates’ investment performance, assessing risk-return characteristics of various strategies, and quantifying the impact of fees on the endowment’s growth.
Following a rigorous evaluation of the proposals, the investment committee with collaboration from North Pier identified three finalists, including the incumbent who proposed an innovative advisory solution. This thorough and customized process ensured that the foundation’s decision-making was grounded in both quantitative analysis and strategic alignment with its evolving needs.
Results
The final selection was made after careful analysis of the candidates’ proposals and extensive reference checks. The chosen firm was able to offer the necessary investment expertise while aligning with the foundation’s long-term goals.
This process not only resulted in a more efficient investment strategy but also enabled the foundation to:
- Align its short-term liquidity needs with its long-term investment goals.
- Negotiate a transparent and competitive fee structure.
- Ensure that the selected firm was culturally aligned with the foundation’s mission.
The foundation’s endowment is now positioned for sustainable growth, ensuring continued support for its educational initiatives for years to come. North Pier’s role in this process helped the investment committee make a well-informed, fiduciary-driven decision, enhancing both its financial stewardship and its impact on the community.