Connecticuts Hartford HealthCare returned 15.9 percent
on its $3 billion fund for the fiscal year ending June 30,
2017, setting a high bar for large nonprofits as they report
over coming weeks and months.
Among those who have posted FY17 results, Hartford ranks in the
top decile for the year and rolling five-year returns,
according to an internal performance summary reviewed by
II. Growth assets and active management drove the
strong returns, said Chief Investment Officer David Holmgren .
From the portfolio side, we took a number of biases or
factor bets, Holmgren said, including a modest
This segment of portfolio contributed most to
Hartfords strong returns, gaining 20.7 percent and
representing 57 percent of assets.
On top of vibrant equity-market beta, Hartfords active
plays largely paid off.
Immediately after the U.S. election in November, Holmgren
said, large-cap U.S. stocks took a bit of stretch on
value, and emerging markets sold off. Why? Who knows. But we
made the shift from large caps to small cap emerging market
equity. From a risk management and investment perspective, the
trade turned out correctly.
[II Deep Dive: Developed-Market Investing with
Hartfords economic hedge assets
including commodities, infrastructure, ship financing, aircraft
leasing, and other investments minimally correlated to the
growth portfolio earned 11.5 percent in FY17. The pool
will remain tilted to commodities in 2018, the summary stated,
given their positive valuation.
Holmgren and his team pride themselves on building tight and
supportive relationships with the funds investment
managers. Hartford has seeded new strategies, financed special
situation deals, and sent employees to far-flung locales to
visit portfolio companies.
This partnership approach also led to five noticeable
manager changes during the year, including three hedge
funds terminated due to portfolio manager turnover.
Overall, Hartford finished more than 500 basis points ahead
of its 10.2 percent policy benchmark return for the year ending
Its a validation of the work, the thought
leadership, the doing-the-homework, Holmgren said.
Its also a product of our commitment to
governance. Hartfords investment board includes
industry practitioners, whereas many hospitals primarily have
medical professionals overseeing asset management .
I cant do a particular project in China without
three people asking me if I thought about a particular piece of
new legislation or a tax implication, Holmgren said with
a laugh. It raises the game.