By Ann C. Logue
Commonfund is an untraditional leader in endowment investing.
It is a non-profit organisation founded in 1971 with a $2.8
million Ford Foundation grant. Its objective was to improve the
way that colleges and universities managed money so that they
could serve their missions better.
At that time, the Modern Portfolio Theory was coming into
vogue, changing the approach that many professional investors
took towards running for-profit portfolios. Philanthropic
accounts, by contrast, were often run by people with more
sincerity than financial sophistication. Donors were sometimes
allowed to recommend investments, and safety trumped prudent
performance. That changed, in part due to
Commonfund’s work, and university endowments are
now among the most sophisticated institutional investors.
Forty years later, Commonfund is an organisation with four
parts: traditional stock and bond management through commingled
accounts and an outsourced investment office service; funds of