18 December 2019

EFFIO autumn meeting takes the long view

The autumn meeting of the European Foundation Financial and Investment Officers (EFFIO) group took place in Brussels on October 10-11, marking the 17th anniversary of the network.

As in previous years, the autumn programme kicked off with a presentation of the annual investment survey. In addition to providing important benchmarking information, most importantly the survey results triggered rich reflections and discussions on investment objectives, spending guidelines, asset allocation, portfolio performance and management.

Elroy Dimson, Professor of Finance at Cambridge Judge Business School, led a session on long-term investing unpacking how historical records can help address contemporary investment questions. According to Professor Dimson the four key questions for long-horizon endowment are a) what does financial history reveal? b) does volatility matter? c) how to invest in a low-return world d) how to go about alternative risk premia?

In order to deliver on their mission, foundations have grappled in nuanced ways over how to use their endowments for good by investing in organisations that seek to realise their aims, and avoid companies that pose conflicts. Jackie Turpin from the Joseph Rowntree Charitable Trust, one of the peer organisations, initiated a discussion on how investors could encourage businesses to be ethical and social, and protect the environment. Valuable learnings were surfaced and shared over how to engage with external manager on responsible investments, especially around ESG issues.

The meeting took place at a critical moment, as the incoming leadership of the European Union until 2024 is preparing to take office. EFFIO peers had the opportunity to exchange views with Rebecca Christie from the Bruegel think tank on the priorities of the new leadership, and gain insights into potential policy courses the institutions might prioritise to confront challenges for the bloc including the rise of geopolitics, the green new deal and societal disruption posed by digital technologies.

In the context of the autumn meeting, participants also benefitted from a tailored exchange with representatives of DG ECFIN of the European Commission and European Investment Fund. The exchange started with a presentation of the InvestEU programme, an instrument to support investment in the next MFF (2021-2027). Among the avenues for collaboration with foundation endowments that were identified in the conversation were:

  • The InvestEU guarantee could support philanthropic organisations to orient investments from their endowment base towards Mission-Related Investing contributing to reduce the risk of their portfolio
  • Establish a catalytic vehicle through an implementing partner as co-investment platforms to include funds from various foundations and to finance smaller projects or intermediaries and funds
  • A collaborative sharing platform with advisory role to implementing partners and financial intermediaries, would allow increasing collective impact by pooling data on co-funding experiences and gaps

Lastly, the meeting came to a close with a reflective session on the 17 years of the network that gave participants the opportunity to reaffirm key principles for participation in this safe and trusted learning and networking space for senior investment professionals from 28 philanthropic endowments.