Since joining the Beverly Hills, Californiabased foundation in 1999, CFO Kristen OConnor and the three-member board have stuck by their resolve to invest with a minimum of expense, avoiding what they deem to be costly hedge funds and private equity funds and allocating more than a third of their portfolio to indexed public equities. It also helped that they were brave enough to rebalance the portfolio back to equities during the financial crisis, resulting in a 27 percent gain in 2009.
On where a small foundation should allocate its resources
We have made a very conscious effort to think about who we are as an organization and to focus more on grant making in terms of our staffing, instead of staffing up to man a full-blown investment office.
On keeping expensive alternative investments to a minimum
Its a pretty unusual approach for an organization of this size, but its worked well. But it makes for very boring cocktail party talk.
On taking sides in the active versus passive investment debate
I think theres an important role for passively managed parts of the portfolio.