Investment Strategies
MCF's investment strategy is designed to achieve superior returns while moderating risk to enable donors to maximize their philanthropic impact.
To meet the philanthropic objectives of donor funds, investments can be made in one or more of six professionally managed investment pools. Within each pool, MCF hires managers who specialize in particular asset classes to ensure that there is superior performance and adequate diversification. The goal is to benefit from a range of expertise from managers in a way that would be impractical and cost-prohibitive for individual investors.
Donors establishing funds can suggest that assets be invested in any proportion in the six investment pools. For example, for no risk to principal, funds are generally invested solely in the money market pool. Endowed funds, whose objective is to preserve the ability of grants to sustain their financial impact over time, typically split their investments by allocating 75% to either of the equity pools and 25% into the fixed income pool.
Equity Pool
The equity portfolio seeks to earn strong long term returns by allocating its assets to a well diversified mix of US equities, international equities, and hedge funds. Historically, this type of portfolio has earned higher returns than fixed income or money market instruments. At the same time, equity portfolios assume larger amounts of risk. During shorter periods, it is quite possible for the portfolio to produce lower returns than the fixed income or money market portfolios. Therefore, the equity portfolio is particularly appropriate for philanthropic assets with a longer term time horizon and should serve as the primary source of long term portfolio growth.
The aggregate investment management fee for this pool is 0.97% (this can vary somewhat, since some managers within this pool are under an incentive program regarding their fees). All returns are net of investment manager fees.
Marin Community Foundation Equity Pool Managers
- 3G Capital Partners, LP
- 747 Capital, LLC
- abrdn, Inc.
- Accolade Capital Management, LLC
- Actis LLP
- Adage Management, LLC
- Ampfield Management, LP
- Artisan Partners
- Bayberry Capital Partners, LP
- Brown Capital Management
- Canyon Capital Advisors, LLC
- Cevian Capital Limited
- Champlain Investment Partners, LLC
- Darlington Partners Capital Management, LP
- Eightfold Real Estate Capital GP V, LLC
- Marble Bar Asset Management, LLP
- Forager Capital Management, LLC
- Fosse Capital Management Ltd.
- FPR Partners, LLC
- Generation Investment Management US, LLP
- Gobi Capital, LLC
- Hartford Funds
- Baker Brothers Investments
- Hengistbury Investment Partners, LLP
- Himalaya Capital Management, LLC
- lchigo Asset Management International, Pie. Ltd.
- iShares
- Kontiki Capital Management HK Limited
- Prime Finance Holding Companies
- Soapstone Management, LP
- Tenzig Global Management, LLC
- TIFF Advisory Services, Inc.
- Verdis Investment Management, LLC
- Westwood Global Investments, LLC
- Working Capital Advisors (UK) Ltd.
FutureFirst Pool
The objective for the FutureFirst Pool is to invest its assets in global equity securities that produce long-term growth and that reflect mission-centric values by avoiding investments in fossil fuel and tobacco. Additionally, FutureFirst will actively commit to investment strategies that carry a high level of social and environmental impact, and will vote proxies based on both U.S. and international criteria developed by Institutional Shareholder Services (ISS). FutureFirst will designate 10% for specific impact investments, and in the interim will hold the assets in an Aperio Global Carbon- and Tobacco-Free Portfolio.
The aggregate investment fee for the management of this pool is 0.59% (this can vary somewhat, since some managers within this pool are under an incentive program regarding their fees). All returns are net of investment manager fees.
Fixed Income Pool
The objective of the fixed income portfolio is to seek yields that are more durable and usually higher than those available from the Money Market portfolio. It is suited for funds that can accept the market-value volatility (unrealized gains or losses) associated with fluctuation in interest rates, changes in credit quality, and currency fluctuations in order to earn a higher level of income over time than is generally available in money market securities.
The investment management fee for this pool is 0.38%. All returns are net of investment manager fees.
Marin Community Foundation Fixed Income Investment Managers
- Colchester Global Investors Limited
- Dodge & Cox
- Garcia Hamilton & Associates, LP
- iShares
- Mondrian Investment Partners Limited
- Payden & Rygel Investment Management
- Vanguard
Enhanced Cash Pool
This pool is designed to improve on the returns provided by a typical money market vehicle. Its goal is to maximize current income while preserving capital and providing daily liquidity. For greater diversification than typical money market investments, the pool invests in money market as well as short maturity fixed-income securities. It differs from traditional money market funds by investing in longer maturities and lower-rated credits to attempt to generate excess relative returns. Unlike a money market account, the Enhanced Cash Pool's market value will fluctuate.
The investment management fee for this pool is 0.26%. All returns are net of investment manager fees.
Money Market Pool
The Money Market portfolio contains U.S. Government securities with an average portfolio maturity of less than 90 days and FDIC insured certificates of deposit with a duration of one year or less. The Money Market portfolio is designed to make liquid assets available in order to meet annual cash requirements. It also provides a vehicle for donors who would like their contributions to earn income at current money market rates while ensuring the preservation of principal. The rate of income varies depending on short-term interest rates.
CommunityFirst Pool
The objective of the CommunityFirst Pool is to invest its assets in loans to nonprofit organizations within the local community. It provides an effective option for those seeking the liquidity and low risk of a money market investment, with guaranteed higher returns (0.25% over the rate paid on the PIMCO Government Money Market Fund, to a maximum of 2.0%). While it offers a lower interest rate than in the past, it will nevertheless compare favorably to other money market investment options. There is also no potential loan loss risk for individual donors.
Additionally, the CommunityFirst Pool provides the opportunity to engage in local impact investing on a variety of projects such as affordable housing, workforce training and children’s centers. To ensure efficient use of funds, the total volume of investments in this pool will be capped at $3 million.
There is no investment fee associated with this investment option.
Investment Committee
MCF's Investment Committee, made up of volunteer professionals in the investment industry, guides the investment strategies of the Foundation.
Investment Pool Performance
Performance of investment pools through October 31, 2024 (net of investment fees, with benchmarks provided for comparisons):
| 1 Month | Quarter | 1 Year | 3 Years | 5 Years | 7 Years | 10 Year | |
Equity Pool | -1.4 % | 3.2 % | 24.9 % | 3.6 % | 8.8 % | 7.4 % | 7.6 % |
Equity Pool Benchmark with HFRI* | -2.0 % | 1.5 % | 24.2 % | 3.9 % | 8.5 % | 7.2 % | 6.9 % |
FutureFirst Pool | -2.0 % | 2.9 % | 34.6 % | 4.4 % | 11.5 % | 10.3 % | 11.0 % |
MSCI AC World Index (Net) | -2.2 % | 2.6 % | 32.8 % | 5.5 % | 11.1 % | 9.6 % | 9.1 % |
Fixed Income Pool | -3.1 % | 0.0 % | 9.5 % | -2.1 % | 0.1 % | 1.2 % | 1.4 % |
Bloomberg U.S. Aggregate Index | -2.5 % | 0.2 % | 10.5 % | -2.2 % | -0.2 % | 1.1 % | 1.5 % |
Enhanced Cash Pool | 0.5 % | 1.4 % | 6.0 % | 3.6 % | 2.8 % | 2.6 % | 2.4 % |
90 Day U.S. Treasury Bills | 0.4 % | 1.3 % | 5.4 % | 3.6 % | 2.4 % | 2.3 % | 1.7 % |
Money Market Pool | 0.4 % | 1.3 % | 5.3 % | 3.5 % | 2.2 % | 2.1 % | 1.6 % |
90 Day U.S. Treasury Bills | 0.4 % | 1.3 % | 5.4 % | 3.6 % | 2.4 % | 2.3 % | 1.7 % |
CommunityFirst Pool | 0.2 % | 0.5 % | 2.0 % | 1.5 % | 1.2 % | 1.4 % | N/A |
90 Day U.S. Treasury Bills | 0.4 % | 1.3 % | 5.4 % | 3.6 % | 2.4 % | 2.3 % | 1.7 % |
* Equity Pool Benchmark with HFRI: 28.5% S&P 500, 9% Russell 2000, 25% HFRI FOF, 21.5% MSCI EAFE, 11% MSCI EM, 5% NCREIF.
