Co-Investment Committee - Management

BACKGROUND

During 2011, the Chairs and CEO’s of Wiltshire, Devon and Somerset Community Foundations agreed that the three

Foundations would explore ways of working together to reduce costs and improve efficiencies. Investing the

endowments together under a single investment policy was identified as as way to save fund managers fees by

having increased scale and sharing expertise to improve governance. Together they set up a co- investment

committee with a co-investment policy and placed their three endowment funds – still retaining their individual

identities, with the same investment managers to benefit from the scale they have together. The separate funds are

co-invested i.e. they do not lose the identity of the investment portfolios but they are pro rata identically invested.

A co-investment committee was formed. The co-investment committee is accountable to each of the Foundation’s

Boards. The committee consists of up to two voting trustees from each participating foundation with the CEOs as

optional observers.

In 2011 two Fund Managers, Smith and Williamson and Ruffer LLP were appointed, who will, in line with an agreed

joint investment strategy, use their best endeavours to manage the investments of the participating Community

Foundations. Each Foundation also has funds with CCLA as part of Communities First.

In 2016 Dorset Community Foundation joined the co-investment committee.

THE AIMS OF CO-INVESTMENTThe co-investment of funds is to support the furtherance of the Foundations’ objects and is critical to their

beneficiaries, donors and the core costs of each Foundation. By co-investing the participating Foundations aim to

improve performance, reduce investment management fees and access a wider pool of expertise from the

participating Foundations Trustee Boards.

The purpose of the co-investment committee is to review and make recommendations on investment strategy,

manage the relationship with Fund Managers, monitor the performance of the portfolios, and agree

recommendations for change to the Trustees of the participating Foundations.

MANAGEMENT OF MEETINGS

Participating Foundations will attend the co-investment committee comprising of two representatives from each

Foundation with relevant investment experience, at least one of whom must be a Trustee. Chief Executives are

standing members of the committee without voting rights.

Meetings are held quarterly at Smith and Williamson’s office, Portwall Place, Bristol. Fund Managers will be invited

to present at three of the four meetings of the year with the December meeting being used to review policy and

strategy.

The Chair of the committee is appointed for one year with the chair rotating through the members of the

committee. The chair for 2016/2017 is Wiltshire, the chairing foundation also provides the secretariate for the

meeting.

Minutes of the meetings are prepared by the secretariat and sent to each participating foundation.

PRACTICE

Each participating Foundation’s executive manages the daily interface between the Fund Managers, the Foundation

and the fundholders.

Each foundation holds funds with CCLA as directed by Communities First. For additions to the endowment not

being put with CCLA, it has been agreed that each foundation would aim to maintain a 75% with Smith and

Williamson, 25% with Ruffer LLP, split of funds.

The co-investment committee is a decision making body only to the extent of making agreed recommendations to

the Trustees of the participating Foundations. The Foundations are expected to delegate investment decisions to

their investment trustees sitting on the co-investment committee who will enable this fast track process. However it

will be incumbent on each participating Foundation to establish their own “fast-track” decision making process to

deal effectively with anything which requires urgent action (eg if the fund manager advises a major change in asset

allocation to respond to a sudden and significant change in market conditions).

It is recognised that occasionally a donor requires his/her fund to be invested through a particular Fund Manager.

While of course this has to be accepted, participating Foundations will use their best endeavours to keep such a

situation to a minimum.

Each participating Foundation will recommend an annual distribution from their own income in arrears from their

funds after the end-of-March valuation. This will enable individual Foundations to plan their level of grant-making

for the year and determine their budget for core costs, whilst maintaining the value of the Endowment Fund over

the long term.

JOINING THE CO-INVESTMENT COMMITTEEThe co-investment committee welcomes new foundations to its group. In order to be considered, the Foundation

must agree to the investment policy, agree to using the fund managers in post based on the 75%, 25% spilt and have

trustees prepared to attend quarterly meetings with the committee.

WITHDRAWALParticipating Foundations may withdraw from these arrangements at any time. Withdrawing from this arrangement

should only be done as a last resort as the co-investment approach relies on the value of the total invested funds to

achieve the levels of discount we have. Withdrawing will impact on the other members of the committee and may

incease the levels of fees for remaining parties.

We will retain a Force Majeure capability and each foundation will be able to make the decision to leave should

economic or other circumstances make this appropriate.

Approved by:

Peter Wyman – Chairman Somerset CF, Sir Michael Ferguson Davie Bt – Trustee Somerset CF, John Glasby – Trustee Devon CF, John Woodget –

Trustee, Wiltshire CF, Rosemary Macdonald – CEO Wiltshire CF

18 Oct 2011

Sally Walden – Trustee, Wiltshire CF, Jason Dalley – Trustee, Wiltshire CF, Jane Barrie – Chairman, Somerset CF, Barry O’Leary – Trustee, Somerset

CF, Peter Holden – Trustee, Devon CF, Nick Fernyhough – Trustee, Dorset CF.