Berkshire Taconic Community Foundation

Investment Managers

Berkshire Taconic strives to achieve excellence in its investments by researching and employing top specialists in each asset class. As of March 31, 2010, the $76 million invested in our Managed Pool was allocated to 1.2% cash, 16.0% fixed income, 20.0% domestic equities, 28.5% international equities, 27.6% alternatives and 6.7% real assets. The equity portion of the portfolio is modeled after the Russell 3000 with an allocation to small, mid, and large cap stocks.

Adage Capital Management
Boston, MA
Adage was formed in 2001 by a team from Harvard Management Company. Adage has $11 billion under management. Adage uses a risk-controlled, industry-neutral, analyst-driven approach to large cap equity investing. The Foundation invested with Adage in 2008.

Artio Global Investors
New York, NY
Artio, located in New York, has $68 billion in assets under management. The international portfolio is 75% developed countries (68% EAFE ex-Japan, 5.6% Japan, 2.7% US and Canada) and 25% emerging markets. It is diversified core portfolio emphasizing value themes identified through rigorous analysis of countries, sectors and companies. Berkshire Taconic invested with Artio in January 2008.

Ashmore Investment Management Limited
London, U.K.
Ashmore was established in 1992 and is a fund and segregated account manager with a focus on the emerging markets fixed income asset class and currencies. Total assets under management exceed $26 billion. In 2004, the Foundation invested in the Emerging Markets Liquid Investment Portfolio (EMLIP).

The Commonfund
Wilton, CT
This investment organization, founded in 1971, is an experienced partner in investment management for nonprofit organizations. The Commonfund is the largest investment manger for nonprofit endowments in the U.S. with over $37 billion under management. Berkshire Taconic began its investment in 2001 by participating in the Commonfund’s Alternative Investment “Capital Partners” which is a fund of funds with a total subscription of $250 million. This investment provides access to Venture Capital, Private Equity and International Private Capital opportunities. In 2007, Berkshire Taconic made an additional commitment to Commonfund’s Private Equity Partners Fund, a fund of funds with a total subscription of $83.9 million.

Cramer Rosenthal McGlynn, LLC (CRM)
New York, NY
CRM is a registered investment advisory company founded in 1973 with over $10 billion under management. The firm’s experience of identifying undervalued companies and patiently waiting for market recognition has provided its clients with substantial long-term returns. Berkshire Taconic participates in the “Mid Cap Value Fund” established in 1998 with assets of $1.4 billion. The Foundation invested with CRM in 2003.

Dodge & Cox
San Francisco, CA
Dodge & Cox was founded in 1930 and manages over $142 billion in mutual fund and private accounts. The Foundation invested in the International Stock Fund in March, 2005. The fund invests in a diversified portfolio of equity securities issued by non-U.S. companies from at least three different foreign countries, including emerging markets. The fund invests primarily in medium-to-large well established companies based on standards of the applicable market.

Elliott International Limited
Grand Cayman, Cayman Islands
Elliott International is a limited partnership created in 1994. The majority of the portfolio is invested in distressed securities and hedge/arbitrage positions. Elliott currently has assets of $7 billion. The Foundation subscribed to Elliot in 2001.

Farallon Capital Management LLC
San Francisco, CA
Farallon was founded in 1986 and manages over $26 billion. Berkshire Taconic committed $5 million to Farallon Capital Institutional Partners, L. P. in 2007. The fund seeks to preserve capital while producing above market returns without the volatility normally associated with the equity markets. Investments are event driven and associated with extraordinary corporate actions with predictable outcomes. Areas of focus include: risk arbitrage, distressed credit investments, real estate related investments, distressed convertibles, private equity and special situations. Farallon Capital Institutional Partners, L. P. has assets of $6.3 billion.

Highclere International Investors
London, U.K.
Highclere International Investors focuses exclusively on managing an international small cap portfolio. The firm has $586 million in assets. The company was established in 2006 and is based in London. The key investment professionals ran Wellington’s International Small Cap strategy from 1997 to 2005. Highclere’s investment process focuses on investment opportunities in the $50 million to $5 billion range, with a higher concentration on the smaller, micro-cap names. Highclere seeks long-term growth of capital with a focus on absolute return and downside protection.

Kinderhook Industries
New York, NY
Berkshire Taconic committed in February 2007 to Kinderhook Capital Fund II, L.P. Fund II, which 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 can accelerate growth rates.

Lexington Capital Partners VII, L.P.
New York, NY
Berkshire Taconic committed $1 million in capital to Lexington Capital Partners in December 2010. This fund 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 to more active management of their portfolios, which increases the volume of the secondary market.

Loomis, Sayles & Company
Boston, MA
Loomis has assets of $115 billion under management. The company uses a value-oriented total return approach to fixed income and seeks to identify securities that are increasing in credit quality and are non-market issues. The manager utilizes interest rate anticipation as an alpha generating strategy. Berkshire Taconic hired Loomis Sayles in January 2008.

Mondrian Investment Partners
London, U.K.
Mondrian Investment Partners manages $62 billion in assets. The company was formed in 2004 and is based in London. The International Small Cap Equity portfolio has $1.2 billion in assets. Mandrian implements a value-oriented defensive investment approach with a strong focus on attractive long-term dividend flow, rigorous dividend discount analysis, and future real growth. Mondrian’s investment process involves a combination of top down research (20%) to determine a range of country allocations and currency movements and bottom-up security research (80% of the process) for assessing individual companies. 89% of the portfolio is invested in Europe. Average capitalization of the 70 to 120 holdings is below $3-$5 million.

Oaktree Capital Management LLC
Los Angeles, CA
Oaktree Principal Fund V, LP 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. The Fund generally will attempt to structure its investments with the goal of obtaining control of, or significant influence in, such companies. The Fund concentrates its core investments in approximately 20 to 30 companies. Berkshire Taconic committed $2 million in November 2009.

Pacific Investment Management Co.
Newport Beach, CA
PIMCO, founded in 1971, is one of the world’s largest active bond managers with over $667 billion in assets under active management. Berkshire Taconic invested its Income Pool in PIMCO’s Total Return Fund, a broad market bond fund, in 2002 and our Managed Pool in 2003. The Total Return Fund has assets over $100 billion.

Select Equity Group, Inc.
New York, NY
Select Equity is a registered investment advisory company that was started in 1990 on the premise that rigorous fundamental research will generate superior investment returns. The firm focuses on the small cap sector. They presently have approximately $6 billion in assets under management. The Foundation placed a portion of its assets with Select Equity in 1999.

Steadfast Financial, LLC
New York, NY
Steadfast Financial manages long-short equity hedge funds and has assets of $350 million. The company employs 10 people and was established in 1997. Steadfast seeks to generate attractive rates of return over a long period of time by investing primarily in publicly traded securities, both long and short, and on occasion secured debt, unsecured debt, or preferred stock. A disciplined approach based on intensive research, a focus on the direction of underlying company fundamentals, and portfolio diversification are the key drivers they use to reach the goal of providing attractive returns on capital without undue risk to principal. Berkshire Taconic invested with Steadfast in 2005.

Stralem & Company
New York, NY
Stralem & Company, Inc is a privately owned, independent asset management firm founded in 1966 and has $2.1 billion under management. Stralem’s flagship product is its US Large-Cap Equity Strategy. Stralem believes there are four distinct phases to a market cycle. By correctly identifying a particular phase and appropriately structuring portfolios, Stralem has successfully navigated changing market environments. Strong fundamental research, coupled with consistent use of a proprietary Relative Growth Valuation Model, provides the framework for stock selection and risk management at Stralem. The investment approach is centralized, disciplined and dynamic and has delivered strong performance across varied markets. Berkshire Taconic invested with Stralem in April 2008.

Thornburg Investment Management
Santa Fe, NM
Thornburg, located in Santa Fe, New Mexico has $44 billion in assets under management. The international portfolio consists of 80% developed countries (55% EAFE ex-Japan, 9.2% Japan, 16.7% US and Canada) and 20% emerging markets. The investment discipline is bottom-up, conservative and fundamental. They are looking to uncover promising companies with sound business fundamentals at a time when their intrinsic value is not fully recognized (out of favor). Berkshire Taconic hired Thornburg in December 2007.

Vanguard Inflation-Protected Securities Fund
Wayne, PA
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 fund maintains a dollar-weighted average maturity of 7 to 20 years.

Walden Asset Management
Boston, MA
Walden Asset Management (assets of $1.7 billion) is a division of Boston Trust & Investment Management, and has been a leader in socially responsible investing since 1975. The Walden Social Balanced Fund has assets of $34.5 million and is allocated generally 60% stock and 40% bonds. The objective is to seek long-term capital growth and income through an actively managed portfolio of stocks, bonds and money market instruments.

Wellington Management Company, LLP
Boston, MA
Wellington Management is a Boston-based global company, started in 1928 as the first balanced fund in the country. It has long been diversified, and started dealing in commodities in 2003. Berkshire Taconic invested in September 2007 in its Diversified Inflation Hedge (DIH) fund, which provides exposure to several asset classes (real assets, commodities, and inflation-linked bonds), and is designed to provide protection against inflationary pressures.