Berkshire Taconic strives to achieve excellence in its investments by researching and employing top specialists in each asset class.
Adage Capital Management was formed in 2001 by a team from Harvard Management Company. Adage employs a uses a risk-controlled, industry-neutral, analyst-driven approach to large cap equity investing. The strategy is managed by 24 teams of experienced analysts organized by industry-group. Industry sleeves are sized by their respective S&P 500 Index weights and risk is managed at the industry and portfolio level. While exposure ranges from 140-170% long and 40-70% short, net exposure is constrained to 100% at all times. The Firm is 100% employee-owned. The Foundation invested with Adage in 2008.
New York, N.Y.
Anchorage Capital Group invests on a long and short basis in a range of assets and across the capital structure in an effort to earn superior risk-adjusted returns and preserve capital. Anchorage Capital Partners is a debt-focused special situations fund that employs hedged investment strategies, such as capital structure arbitrage, curve and paired trades, and directional investment strategies such as total return, reorganization and liquidation investments. Hedged investment strategies seek to isolate relative value inconsistencies within a company’s capital structure or across an industry sector and may minimize market, industry or company-specific risks. Anchorage is 90% employee-owned. The Foundation invested in Anchorage Capital Partners in 2015.
New York, N.Y.
BlackRock’s iShares offer low cost, passive exposure to a variety of asset classes including domestic and international equities, bonds, commodities and real estate via exchange traded funds (ETFs). The Foundation complements active domestic equity exposure with an allocation to the iShares Core S&P 500 ETF which seeks to replicate the characteristics and returns of the S&P 500 Index. The Foundation purchased the iShares Core S&P 500 ETF in 2006.
Since its founding in 1993, Breckinridge has focused primarily on the management of municipal bond portfolios, and more recently has expanded its offerings to also include taxable strategies. Breckinridge’s Intermediate Term Taxable Bond strategy is a highly customizable approach that seeks to build a sustainable-focused portfolio consisting primarily of high-grade taxable municipal and corporate bond securities. Within municipals, the Firm has typically focused on bonds that have a direct benefit to the community such as education, health care, infrastructure/transportation, and environment. In terms of corporate bonds, Breckinridge typically invests in securities that have passed certain environment/social/government investing (ESG) criteria. The strategy aims to maintain high credit quality with an average minimum portfolio credit rating of AA−, with no bonds below an A3/A− rating by Moody’s or Standard & Poor’s at the time of purchase. The investment process begins with the development of top-down views that emerge from Breckinridge’s monthly meetings of its Investment Committee that consists of senior members of the investment management team. The Firm has built a robust trading system in an effort to ensure client accounts remain within its respective guidelines. The foundation invested its entire fixed income allocation within the Socially Responsible Investment Pool with Breckinridge in 2016.
Los Angeles, Calif.
Founded in 2001, Causeway Capital Management has a long and successful history of implementing its value oriented approach in equity investing. Causeway’s investment universe is comprised of companies generating superior yields with attractive industry dynamics, financial strength, and competitive positioning. The Firm’s portfolios are team managed with portfolio decisions made collectively based on proprietary, fundamental research. Causeway’s Global Value strategy is concentrated in the team’s best ideas with limited regard to country and sector exposure. All senior investment professionals have an ownership stake in the Firm which is100% employee-owned. The Foundation established an investment in the Causeway Global Value strategy in 2015.
Cinven Capital Management was founded in 1977 and is comprised of over 60 investment professionals operating from Cinven’s investment offices in London, Paris, Frankfurt, Milan and Madrid, and portfolio team offices in Hong Kong and New York. Cinven focuses on lead control positions in strongly performing or market leading, cash flow generative companies with headquarters in Europe. In its Fund 6, Cinven will seek to make primarily equity investments in Europe in connection with management buy-outs or management buy-ins and private equity transactions. The foundation committed €1.5 million to Cinven Fund 6 in 2016.
Founded in 1971, Commonfund is an experienced partner in investment management for non-profit organizations. The Foundation made a commitment to Commonfund Capital Partners 2000, a private equity fund of funds that provides access to venture capital, private equity and international private capital opportunities in 2001. In 2007, Berkshire Taconic made a $3 million commitment to Commonfund’s Private Equity Partners Fund VII, a diversified fund of funds with exposure to growth equity, middle-market funds, and large leveraged buyouts.
San Francisco, Calif.
Dodge & Cox was founded in 1930, is 100% employee owned, and manages over $260 billion in equity and fixed income assets.
The International Stock Fund strives to generate attractive long-term performance through independent, bottom-up research with an emphasis on a company’s long-term fundamentals. Dodge & Cox strives to invest in companies whose earnings and future cash flows are not yet reflected in their share prices. Research is conducted by a deep team of investment professionals and portfolio decisions are made by the ten-member International Investment Policy Committee. The resultant portfolio is diversified at the position (75-100), sector, and country level with a 20% cap on emerging markets exposure. The Foundation invested in the Dodge & Cox International Stock Fund in 2005.
The Income Fund seeks to provide a high and consistent level of current income along with capital preservation. Fundamental credit analysis and a three to five-year investment horizon are employed in an effort to deliver excess returns. Dodge & Cox emphasizes reliable cash flows and securities with the potential for price appreciation. The portfolio is team-managed with the Fixed Income Policy Committee, comprised of senior members of the fixed income team and the broader firm, responsible for final approval of investment ideas and ultimately portfolio implementation. The portfolio is broadly diversified and exhibits low turnover. The Foundation invested in the Dodge & Cox Income Fund in 2013.
New York, N.Y.
Elliott is a large, employee-owned multi-strat firm with offices in New York, Hong Kong and London. Elliott may invest in a variety of strategies including distressed securities, performing debt, equity-oriented positions (both public and private equity including control and board involvement situations), hedge/arbitrage positions, basis trading, and portfolio volatility protection. Elliott’s approach is unique and focuses on complex situations which often results in the Fund being uncorrelated with the market and other hedge funds. The Foundation subscribed to Elliott International in 2001.
Houston and Dallas, Texas
EnCap was established in 1988, and since 1994 EnCap’s funds have provided growth capital to operating companies in the oil and gas industry. With Fund XI, EnCap will make meaningful commitments to experienced management teams operating across the U.S. and Canada that acquire and develop upstream oil and gas assets. EnCap may also invest up to 15% of the fund in midstream assets alongside its EnCap Flatrock Funds. The foundation committed $1.5 million to EnCap Energy Capital Fund XI, L.P. in 2016.
San Francisco, Calif.
Employee-owned Farallon was founded in 1986 and manages over $20 billion in assets. Farallon seeks to preserve capital while producing above-market returns without the volatility normally associated with the equity markets. Farallon utilizes a multi-strategy approach that emphasizes businesses or securities that it believes are undergoing change and demonstrate a predictable appreciation in value. Areas of focus may include: risk arbitrage, distressed investments, real estate-related investments, convertibles, private equity, and special situations. The Foundation invested in Farallon Capital Institutional Partners in 2007.
Highclere focuses exclusively on managing international small and small/mid cap portfolios. Highclere was established in 2006 by Ed Makin who managed Wellington’s International Small Cap strategy from 1997 to 2005. Highclere seeks long-term growth of capital with a focus on absolute return and downside protection. The investment team focuses its time on extensive company research in an effort to thoroughly understand underlying quality, growth drivers, strength of management team, competitive positioning, and market environment to support future success. Makin retains the final vote on all portfolio decisions. The Firm is 50.1% owned by active employees. The International Small Cap strategy is closed to new investment. The Foundation invested in the International Small Cap strategy in 2008.
New York, N.Y.
The Jordan Company employs approximately 40 investment professionals in three offices located in New York (headquarters), Chicago, and Shanghai. The Jordan Company seeks control private equity investments in well-managed and profitable businesses located principally in North America. The Firm’s investment approach is to acquire companies and to partner with management to support these investments with a hands-on, value-add operational strategy. The Firm seeks to make initial investments of $50–500 million of equity in 15–25 middle-market companies with enterprise values from $100 million to over $2 billion. The Foundation committed $2 million to The Resolute Fund III, L.P. in 2014.
Kinderhook makes equity and equity-like investments in companies within a $10 - $50 million valuation range and seeks acquisitions of orphaned non-core divisions of corporate parents, management buyouts of entrepreneurial-owned businesses where the founder is no longer active, and acquisitions of platforms where the infusion of capital and management expertise can accelerate growth rates. The Foundation committed $2 million to Kinderhook Capital Fund II, L.P. in 2007.
Founded in 1994, Lexington Partners is the largest independent manager of secondary private equity and co-investment funds. Lexington Capital Partners Fund VII focuses on the purchase of privately negotiated secondary positions in domestic and international venture capital (20-25%), buyout (70-75%), and mezzanine funds (0-5%). The fund seeks to provide access to previously offered private equity partnerships and achieve superior risk adjusted returns of 25+%(net). Lexington believes that private equity investors are trending towards more active management of their portfolios, which increases the volume of the secondary market and provides the investment opportunity. The foundation committed $1 million to Lexington Capital Partners Fund VII in 2009.
Madison Dearborn Partners was formed in 1992 and leverages a roster of dedicated industry teams, pursuing both buyout and growth equity transactions. The Firm’s 45 investment professionals operate out of a single office in Chicago, IL. Madison Dearborn has a middle and upper middle market with an emphasis on companies located in the U.S. Midwest. Madison Dearborn seeks to invest in “best in class” companies across a variety of stages and structures and add value by supporting experienced management teams through business growth, repositioning and/or transformation. The foundation committed $2.5 million to Madison Dearborn Capital Partners VII in 2016.
Mondrian Investment Partners was formed in 2004 and is 100% employee-owned following a 2011 buy-out of private equity firm Hellman & Friedman’s minority interest. Mondrian implements a value-oriented defensive investment approach across all equity strategies, focusing on attractive long-term dividend flow, rigorous dividend discount analysis, and future real growth. Mondrian combines top down research (20% of the process) to determine a range of country allocations and currency positioning with bottom-up company diligence (80% of the process) for assessing individual stocks. The International Small Cap strategy focuses on companies with capitalizations below $3.5 billion and is closed to new investors to preserve investment flexibility. The Foundation initiated an investment in Mondrian’s International Small Cap strategy in 2008.
Oaktree makes investments primarily in equity, equity-related, and debt obligations of corporations, partnerships, limited liability companies, and other similar entities that management believes are undervalued, offer an opportunity for growth if funded appropriately, and provide an attractive risk/return profile. Typically Oaktree will attempt to structure investments with the goal of obtaining control of, or significant influence in, such companies. Funds are concentrated with core investments in approximately 20 to 30 companies. The majority of the firm (~70%) is owned by the Firm’s eight Principals and other employees. The Foundation committed $2 million to Oaktree Principal Fund V in 2009.
Och-Ziff’s $47 billion in assets under management are managed across a variety of alternative investments including long/short equities, convertible arbitrage, global merger arbitrage, event-driven equity restructurings, distressed credits, private equity, and real estate. Och-Ziff Real Estate Fund III is a private equity real estate fund pursuing a diverse mix of opportunistic strategies, including both traditional and non-traditional real estate sub-sectors. Och-Ziff leverages its network and sourcing capabilities in an effort to find investments that have attractive absolute return characteristics across real estate cycles, add value after acquisition through management of assets, and maximize value through accretive exits. Och-Ziff is majority owned by employees. The Foundation committed $3 million to Och-Ziff Real Estate Fund III in 2013.
San Francisco, Calif.
Parnassus' founder Jerome Dodson was among the pioneers in establishing an investment firm focused on identifying companies with positive performance on environmental, sustainable and corporate governance (ESG) criteria. Their investment philosophy is centered upon capital preservation, focusing on downside protection with upside participation. Parnassus’ Core Equity strategy utilizes a bottom-up approach to identify large- and mid-cap companies with clear and sustainable competitive advantages, run by quality management teams with appropriate incentives that are undervalued as a result of short-term concerns. ESG factors evaluated include corporate governance and business ethics, employee benefits and corporate culture, stakeholder relations, customers and supply chain, and environmental impact. The fund will not invest in companies that derive significant revenues from the manufacture of alcohol or tobacco products or from direct involvement with gambling, weapons, nuclear power, or the government of Sudan. The foundation invested with Parnassus in 2016.
Prince Street is an investment management firm founded in 2001 to focus on global emerging and frontier market investments. Prince Street manages Long-Short, Absolute Return, Flexible Balanced and Long Only Strategies. Investment ideas are typically internally-generated by the investment team through a continuous cycle of research, in-country visits and company management dialogue. Prince Street looks for companies with a competitive advantage to their domestic and global peers. Investment ideas are screened for liquidity, valuation and corporate governance progress before being included in the portfolios. The Firm is majority owned by its employees. The Foundation invested in Prince Street’s long/short EM fund in 2010 and in the long-oriented Opportunities strategy in 2011.
Founded in 1968, TA Associates is a Global Growth Private Equity firm. TA Associates XII LP intends to invest globally in profitable middle-market companies in growth industries and will include both minority and control investments. Target opportunities include minority recapitalization of companies to finance growth and/or shareholder repurchases, both leveraged and unleveraged, as well as management buyouts. The Foundation committed $1 million to TA Associates XII LP in June 2015.
Vanguard offers a suite of traditional investments to retail and institutional investors and is owned by its fund shareholders. The Foundation invests in a variety of Vanguard funds to meet its diversification needs.
Vanguard Extended Market Index Fund seeks to provide complementary exposure to mid- and small-cap equities via replication of the S&P Completion Index. The foundation established a position in the fund in 2015.
Vanguard Inflation-Protected Securities Fund seeks to provide inflation protection and income consistent with an investment in inflation indexed securities. The fund invests in high-quality inflation-indexed bonds issued by the U.S. Treasury and government agencies as well as domestic corporations. Principal and interest payments are adjusted quarterly in response to changes in inflation. The foundation purchased the Fund in 2009.
The foundation’s Socially Responsible Investment Pool is invested in the Vanguard FTSE Social Index Fund. The fund offers low cost, passive exposure to a benchmark of large and mid-capitalization stocks that have been screened for certain social, human rights, and environmental criteria. The foundation made the Socially Responsible Investment Pool investment in 2013.
Varde Investment Partners strives to generate superior absolute returns with solid downside protection. Varde is a deep value manager that seeks to invest in nonperforming and underperforming corporate, consumer, and real estate loans, structured products, high yield debt, and certain equity securities and derivatives primarily in the U.S. and Europe. The vast majority of the portfolio is invested in long positions which are diversified by asset type, industry, and geography. Varde is 100% owned by its Principals. The foundation funded an investment in Varde Investment Partners in 2015.
New York, N.Y.
Since its inception in 1966, Warburg Pincus has predominantly pursued a strategy of global, thesis-driven, growth investing. The foundation of the firm’s investment strategy is identifying talented entrepreneurs and management teams generally tied to a specific thesis. The firm uses its experience, global presence, and networks to formulate differentiated investment themes across its core industry sectors and geographies. Warburg Pincus emphasizes flexible investing in growth companies around the world and across specific industry sectors.
It is expected that Warburg Pincus Private Equity Fund XII will contain a diverse portfolio of 60–90 companies across North America, Europe, Asia and other developing markets.
The foundation committed $1.5 million to Warburg Pincus Private Equity Fund XII in 2015.
A. J. Pietrantone
Vice President, Finance & Administration
413.229.0370 x 112
Email A. J.
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