A PARTNERSHIP FOR YOUR FUTURE

Transcription

1 TIAA-CREF trust company, FSB A PARTNERSHIP FOR YOUR FUTURE ENDOWMENT MANAGEMENT SERVICES

2 STRONG CLIENT ADVOCACY A well designed endowment management strategy will impact generations; bringing strength to a mission and providing security for decades to come. TIAA-CREF s mission since 1918 still rings true today: helping to meet the financial needs of those who serve the greater good. Our defining strength is an unwavering dedication to the nonprofit organizations that we have served for nearly ninety years. TIAA-CREF has long subscribed to a different set of guiding principles: principles directly influenced by the people we serve. We are one of the few certainties in a shifting financial world. That is why TIAA-CREF is the financial organization you can trust to provide superior products and services to help your organization meet its goals in the 21st century. 2 3

3 PHILOSOPHY Asset allocation, the key factor in determining portfolio return, is at the heart of TIAA-CREF Trust Company s investment philosophy. We work with our clients to gather the necessary information to develop appropriate return goals, while accommodating the tolerance of your organization to short- and long-term risk. We will work closely with your organization to formulate a sound strategy and recommend a portfolio designed specifically to achieve the objectives of your endowment. The foundation of our relationship is our commitment to: Assessing individual needs and objectives. Focusing on the key determinant of long-term return: asset allocation. Diversifying each portfolio broadly across asset classes, economic sectors, and securities. Optimizing each portfolio s risk/return profile. Providing and maintaining a reasonably priced investment solution. Reviewing markets, performance, and policies on an ongoing basis. Adapting strategies as necessary to reflect changing client needs. DETERMINANTS OF LONG-TERM RETURN VARIABILITY INVESTMENT MANAGEMENT Our goal at TIAA-CREF Trust Company, FSB, is to offer the most thorough and thoughtful investment process available to our clients. An integral part of our process is the selection of investment vehicles that provide each crafted portfolio appropriate exposure to a broad array of asset classes. Our spectrum of investment products includes both proprietary and third-party institutional mutual funds and spans a full range of investment choices from low cost, low tracking error index products to aggressive higher tracking error, actively managed solutions. Every one of our investment products is screened through a rigorous qualitative and quantitative process. This proprietary screening method is grounded in sound fundamentals of modern portfolio management and financial theory. The mutual funds we select provide an efficient means for gaining exposure to various asset classes. We work directly with our clients to identify the most appropriate investments to suit their objectives. Each portfolio is carefully constructed to meet the current and future needs of the institutions we serve. Asset Allocation 91.5% Market Timing 1.8% Unexplained 2.1% Security Selection 4.6% Source: Brinson, Hood and Beebower 1986 Financial Analysts Journal, vol. 42, no. 4 (July/August); Sharpe 1991 Financial Analysts Journal, vol. 47, no. 1 (January/February); Brinson, Singer & Beebower 1991 Financial Analysts Journal, vol.47, no.3 (May/June); Hensel, Ezra and Ilkiw 1991 Financial Analysts Journal, vol. 47, no. 4 (July/August); Jahnke 1997 Journal of Financial Planning, vol. 10, no. 1 (February); Lucas 1998 Pension Investment Handbook; Stevens, Surz and Wimer 1999 Journal of Investing, vol. 8, no. 4 (Winter); Ibbotson and Kaplan 2000, Financial Analysts Journal, vol. 56, no. 1 (January-February). 4 5

4 PROCESS When it comes to managing endowments, a thorough knowledge and understanding of our client s needs and objectives is essential when developing an effective investment strategy. Our comprehensive investment process is designed to identify your institution s needs, establish realistic objectives, and pursue them in a systematic and attentive manner. We focus on developing a diversified and optimized portfolio tailored to fit the exact needs of your institution. We examine such factors as spending needs, fund raising ability, operating environment, relevant business risks, and capital structure. Additionally, we review your organization s investment policies and guidelines and offer consultation on potential policy changes. The results of our discussions will then serve as the framework to create a strategically allocated portfolio. While our recommended investment strategies are typically designed with the long term in mind, we understand that the needs and objectives of our clients can change. Therefore, each asset allocation strategy and investment portfolio is monitored and analyzed on an ongoing basis to ensure it continues to reflect your institution s needs. Our investment process is composed of the following iterative steps: ONGOING REVIEW OF NEEDS, OBJECTIVES, AND PERFORMANCE NEEDS AND OBJECTIVES ASSESSMENT INVESTMENT POLICY CONSULTATION AND DEVELOPMENT ADMINISTRATIVE SERVICES Each client of TIAA-CREF Trust Company is assigned an administrative team to handle the day-to-day activities involved in managing your endowment funds. These professionals coordinate many back-office functions: Providing custody services for your book of assets. Establishing new accounts. Safekeeping assets, settling security transactions, and liquidating non-cash gifts. Processing contributions to and disbursements from your account. PORTFOLIO MONITORING AND REBALANCING ASSET ALLOCATION ANALYSIS Delivering consolidated monthly financial reporting, including any sub-accounting as necessary. Coordinating the transfer of cash and securities. PORTFOLIO CONSTRUCTION 6 7

5 RESOURCES TIAA-CREF Trust Company, FSB sets itself apart by appointing and retaining outstanding professionals with high levels of education, accreditation and experience. DEDICATED PORTFOLIO MANAGER Your portfolio manager is responsible for assessing the needs of your institution, developing a diversified strategy, and diligently monitoring each investment. He or she will consult with you on an ongoing basis with regard to your investment policy. ADMINISTRATIVE SERVICES TIAA-CREF Trust Company provides substantial administrative support. A dedicated administrative team, headed by an experienced trust administrator, will coordinate the delivery of our services, creating a single point of contact. REPORTING We recognize the importance of effectively communicating financial information to our clients, including their boards, investment committees and other interested parties. All clients of TIAA-CREF Trust Company receive comprehensive, sophisticated reporting on all account activity including performance results, as well as multi-level sub-accounting. PARTNERSHIP FOR YOUR FUTURE An effective endowment management strategy is fundamental in helping your institution reach its long-term goals, and build strength in the relationship with its donors. TIAA-CREF Trust Company is experienced in working with non-profit organizations to customize the management services that are vital to the success of any endowment. TIAA-CREF Trust Company provides each of our clients with a diverse range of sound investment choices, attentive administration, and state-of-the-art reporting. Our dedication to supporting your success is driven by the expertise of our people, the efficiency of our systems, and our commitment to our clients. At TIAA-CREF Trust Company, we exist for the greater good of our clients in the same way that institutions like yours exist for the greater good of the lives you touch. TECHNOLOGY TIAA-CREF keeps abreast of all new innovations as a way to continue offering services that are client friendly and convenient. We provide our clients with state-of-the-art technology in areas such as online account access, data transfers and software upgrades. 8 9

6 To find out more about how your institution can benefit from our services, please contact us at or visit our website TIAA-CREF trust company, FSB SERVICES: ENDOWMENT INVESTMENT MANAGEMENT PLANNED GIVING TIAA-CREF, since its establishment in 1918 has maintained a unique place in the financial services community. By providing Financial Services for the Greater Good, we solely focus on those people and institutions who promote the greater good. TIAA-CREF Trust Company, FSB is a full service trust operation with a staff of experienced trust, investment, and administration professionals. It was established in 1998 to support the broader mission of TIAA-CREF by providing individuals and institutions in the education and research community a wide array of high quality and reasonably priced financial services. ONE METROPOLITAN SQUARE 211 NORTH BROADWAY SUITE 1000 ST. LOUIS, MO

7 Investment products are not insured by FDIC; are not deposits or other obligations of TIAA-CREF Trust Company, FSB; are not guaranteed by the TIAA-CREF Trust Company, FSB; and are subject to investment risks, including possible loss of principal invested TIAA-CREF Trust Company, FSB, One Metropolitan Square, 211 North Broadway, St. Louis, Missouri C39643 (9/07)