Partners in Funding Mission

Foundation Announces Investment Changes

August 28, 2017
The Presbyterian Foundation has made changes to its investment programs to better support mission and ministry for today, tomorrow and all tomorrows. The Presbyterian Foundation has streamlined its investment policy, and is now announcing its partnership with Chicago based Northern Trust to serve as the Outsourced Chief Investment Officer (OCIO), providing investment advisory services, for the Presbyterian Endowment Fund as of September 1, 2017.

“There’s no question that the OCIO model, which we adopted in 2012, is working well. At the same time, we’ve heard from many of our constituents in recent years that they would like to see a less complicated approach to investment of the Foundation’s endowments,” said Tom Taylor, the Foundation’s President and Chief Executive Officer. “We’ve also seen opportunities grow in indexed investing which can provide that simplicity and reduce management fees in the process.”

“As our investment committee worked to make these moves toward streamlining the portfolio and lower fees, they recognized that a new investment management partner with expertise in both active and indexed investment strategies was an important element,” Taylor said.

Northern Trust will serve as co‐fiduciary with the Foundation, held to the highest standards in acting on behalf of donors and beneficiaries. Northern will have primary responsibility for due diligence and manager selection, while the Foundation trustees will continue to set the guiding investment policy. The Presbyterian Foundation maintains its commitment to investing in accordance with Presbyterian values and policies.

Northern Trust, founded in 1889, is a global financial services provider with assets under management of $1 trillion. Northern has 25 years of experience in responsible investing with $60 billion in socially responsible investment funds.

The Presbyterian Endowment Fund (PEF) is the investment vehicle for permanent funds of the Presbyterian Church. Donors as far back as 1821 made irrevocable gifts to the Presbyterian Foundation to provide a funding stream in perpetuity for their beloved missions and ministries. Today, there are over 7,000 permanent funds with $681 million in assets that support ministry and mission in congregations, mid councils, national agencies, international mission and ministry programs, and many other Presbyterian-related entities.

The PEF portfolio is diversified across many asset classes and managers. The portfolio has been undergoing changes this year which have benefited returns. The PEF one year performance as of June 30, 2017 was 13.8% vs. its policy benchmark return of 12.4%. Streamlining the portfolio (not as many asset classes and managers) allows the Fund to reduce costs which add to overall returns. Additional returns enable the Fund to sustain payouts to mission.

Permanent Fund payments to beneficiaries follow a spending formula of 4.25 percent based upon a 20‐quarter rolling average. New funds may be established as permanent gifts to pay income in perpetuity or managed through the Presbyterian Endowment Service, an investment option for management of long‐term endowment assets.

Anita Clemons, the Foundation’s Managing Director of Investments, remarks “The Presbyterian Foundation remains vigilant in its oversight of the permanent endowment funds. The investment markets continue to change over time. Strategies that worked well in the past may not have the same opportunities for success in the future. The focus of these changes is on generating a sustainable return for mission beneficiaries today and continuing that support in perpetuity.”

The Presbyterian Endowment Fund continues to be managed in accordance with Presbyterian values. The Foundation employs screening, corporate engagement, and impact investing – the traditional tools of the denomination’s socially responsible investment program.

If you have further questions, please contact Anita Clemons at 502‐569‐5912 or via email at

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