Having a well-defined and clearly articulated IPS is vital in today's challenging investment landscape. Find out how a "great" IPS can help drive investing success.
Today’s increasingly complex investment landscape places greater pressure on the fiduciaries overseeing the investment pools of endowments, foundations and healthcare organizations. Fiduciaries are not only reexamining their current investment decision-making practices, but also seeking to ensure that those practices allow for enough flexibility in implementation to maximize the likelihood of investment success. Recognizing the increasing importance of the investment portfolio to the needs of the broader organization, more fiduciaries are taking a holistic view, spending as much time on issues such as total enterprise risk management, good governance practices and spending policy as on asset allocation and investment strategy. Central to communicating the investment philosophy and decisions informed by this view is a clearly articulated investment policy statement (IPS), which serves as the foundation of an integrated and aligned oversight process.
In this paper, we summarize the key elements and discuss the ways by which "great" policy design can accommodate dynamic portfolio management and ultimately drive investing success.