I had the pleasure of leading a panel of accomplished institutional faith investment consultants and asset owners at a recent convening hosted by the Knights of Columbus Asset Advisors.
As part, I asked the panel “what should asset managers know about faith asset owners, and what should they do more of - and less of - for this audience?”
I suspect you’re now conjuring answers to these questions, here’s a summary of what I heard.
Know Your Client: Know what type of returns the faith asset owner requires – if they’re return seeking, because they oversee retirement assets or an endowment (as examples), they generally expect market rate or better returns. Or, they may have more flexibility or even a mandate or targeted portfolio allocation for below-market rate investments (e.g. some foundations). Also know their liquidity constraints, can they accommodate lock-ups and limited access to their investments? Finally, learn about their investment interests and themes ‘…housing, healthcare, education, other areas, if you’re an impact manager learn or ask about where my organization is active’. To paraphrase one panelist,
“Know what type of investor I am before you setup the meeting, and be upfront about the return expectations, fees and liquidity requirements for the investment strategy you are selling --- this can save everyone a lot of time.”
Further, read their investment policy and research the faith organization. Investment policies, fund reports or outlines are often available online and will contain useful information for asset managers.
Broad Responsibilities: Often financial leaders at faith organization have a broad range of financial responsibilities, and sometimes overseeing assets (e.g. retirement plan, etc.) is just one part a broader role that’s spread across occasionally limited staff resources:
“We may not have a large number of resources focused on investing …. and I get maybe 15 minutes a day to spend on investing relative to my other financial responsibilities.”
This was a significant theme in our recent paper Faith-Consistent Investing and Smaller Organizations. Paraphrasing the panel: be efficient in your communications and provide summary or issues-based reporting, and offer your help and resources to help faith asset owners with their investment research needs and projects.
Awash in Data: ‘… feels like I get 4,000 emails a day … with information piling in at a very rapid rate’. Among all this data, what is important information? What issues or questions are most pressing or prescient? ‘…not from your perspective as an asset manager, but from my perspective as your client or your prospective client?’ The panel discussed effective use of summary ‘pass/fail’ or ‘key metrics’ reports, and the potential use of AI to generate brief narrative summaries of multi-page portfolio, proxy voting and performance reports from asset managers.
One comment that received widespread support:
“…I don’t need another general investment market overview …”
The panel closed with an overall recommendation for asset managers and consultants to ‘…treat the asset owner’s board or investment committee like a seated jury…as a lawyer you have a short amount of time to communicate potentially complex information, have the board or committee understand a lot of context, and be able to make decisions’.
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