Foundation

Our client’s foundation provides grants for innovative projects. To fund those grants in a sustainable manner, they needed a target return portfolio that effectively monitored risk and managed liquidity for grant distributions. As a sharia-compliant endowment with an internal board that oversees those investments, they needed a partner with the ability to fully customize asset securities and adapt to the foundation’s individualized requirements. The client was new to working with external asset managers, so designing a portfolio with the right tradeoffs for risk and return was a challenge that required a flexible and collaborative approach. Could they find a partner to design and manage this complex and multi-faceted mandate?

Working in partnership with Franklin Templeton Investment Solutions meant gaining access to the full potential of a global firm with deep expertise in portfolio construction, custom equity, fixed income, and shariah-compliant investing. The client portfolio managers (CPMs) brought in investment teams across the organization to build bespoke funds specific to the mandate. Our Systematic Strategies Portfolio Management Group built dedicated smart beta strategies that captured market return in a cost-effective way. The Fixed Income Team designed the liquidity sleeves and a dedicated team worked with our portfolio managers to ensure the investments were in line with the client’s shariah mandate.

The client was happy with the cost-effective and diversified portfolio that met their many criteria. When market volatility increased, we ensured that they understood the trade-off between long-term risk and returns and how it impacted their objectives. When they chose to adjust portfolio targets, based on a growing discomfort with the initial volatility threshold, we adjusted the benchmark in line with their renewed objectives. The partnership was deepened by our flexibility and willingness to continually evolve the fund to better suit the client’s improving market knowledge.