Investment Code Created For Endowments
For years, endowments, foundations and charities have had ready access to comprehensive guidelines on how to govern their grant-making processes. What the organizations haven't had, for the most part, are clear blueprints regarding the management of their financial resources. This hasn't mattered much in terms of financial chicanery and blatant misconduct-Jon Stokes, head of standards of practice at CFA Institute, can't recall any specific major problems along these lines being reported to his watchdog organization. Then Bernie Madoff made headlines and the economy tanked, underscoring the obvious: But what if? Then what?

Clearly, it behooved the charitable sector to "re-examine how investment funds should be established and managed," as Kurt Schacht, managing director of CFA Institute's Standards and Financial Market Integrity division, put it. Toward this end, the Charlottesville, Va.-based CFA (105,000 members strong, including the world's 90,000 CFA charter holders, in 135 countries and territories) put its considerable resources to work. Partnering with leading industry experts, such as the Council on Foundations, Institute for Private Investors, Philanthropic Foundations Canada, Philanthropy Australia, and European Foundation Centre, CFA  released The Investment Management Code of Conduct for Endowments, Foundations, and Charitable Organizations.

This Endowment Code, a comprehensive best practice guideline-CFA calls it a "roadmap"-is designed with charitable trusts, endowments, independent foundations, non-governmental organizations, philanthropies and public funds in mind. Given that the underlying responsibilities and ethics of investment management of these organizations are very similar around the globe, the code set forth by CFA is universal in its application and value.

Basically, the code provides charitable organizations with a framework for establishing investment oversight practices, and contains specific investment management standards that are supplemented by in-depth best practice guidance and examples. Members of a governing body are required to: "Act with loyalty and proper purpose; Act with skill, competence, prudence, and reasonable care; Abide by all laws, rules, regulations, and founding documents; Show respect for all stakeholders; and Review investment strategy and practices regularly." It is hoped, as stated in the code, that the incorporation of these ethical principles-and other guidelines-will enhance the policies and procedures related to the management of a charitable entity's financial assets.

The "Endowment Code" is an offshoot of ethical guidelines CFA put together in 2008 for trustees of pension plans, Stokes explained, and while he expects that charitable organizations will soon use the new code "as a badge to demonstrate their integrity and investment-decision making skills," their doing so is purely voluntary. For further information about code visit the CFA Web site at

In other news ...

Hedge funds posted negative performance in November, according to the recent Credit Suisse Liquid Alternative Beta Index, finishing down 1.29% as managers struggled to find profitable positions amid falling equity markets. Despite the negative monthly performance, four out of the five liquid indices remain in positive territory for the year, noted Jordan Drachman, head of research for Alternative Beta Strategies at Credit Suisse, with the Event Driven Liquid Index leading returns at 9.79% year-to-date. For further information go to

A recent survey of corporate executives indicates that economic recovery will help fuel deals globally over the next 12 months. Mergermarket, an independent M&A intelligence service, and Merrill DataSite conducted the study with input from private equity practitioners, legal advisors, and financial advisers based in Europe, North America and the Asia-Pacific region. The increase in "deal flow"-aided by improved access to financing-is expected to be particularly significant in Europe, though there is a risk that M&A activity there could be short-lived, according to the study. For further information go to

New York Life Investments has signed an agreement to acquire a majority stake (60%) in Private Advisors LLC, an alternative investment firm based in Richmond, Va., with about $3.9 billion in assets under management and over 60 investment professionals. Private Advisors is headed by founder and managing partner Louis Moelchert Jr, who previously managed the endowment for the University of Richmond. The deal is expected to close by December 31.

Assets declined less than liabilities at the typical U.S. corporate pension plan in November, resulting in a funded status of 80.5%, a slight improvement from the 80.3% funded status at the end of October, according to monthly statistics published by BNY Mellon Asset Management. For further information go to

Fortigent LLC of Rockville, Md., a provider of outsourced wealth management solutions for financial advisors and institutions targeting high-net-worth clients, announced that year-to-date (through the end of October) the company signed on more than 31 new firms, bringing to 85 the number of Fortigent clients that collectively advise high-net-worth-clients on more than $45 billion in assets. This represents the company's strongest year since its founding in 1994.

Gerova Financial Group Ltd., a reinsurance and financial services group headquartered in Bermuda, and London-based Seymour Pierce Holdings Ltd., a privately-owned investment bank, have signed a agreement for Gerova to acquire 100% of Seymour Pierce, creating a financial services company focused on investment banking, asset management and reinsurance. Upon successful completion of the acquisition on January 1, Gerova will change its name to Seymour Pierce & Company Ltd. Gerova has also entered into an agreement to acquire 100% of Ticonderoga Securities, a New York City-based institutional broker-dealer.

While a recent study by the Nonprofit Research Collaborative showed that about half of American charities reported a decrease in donations in 2009-and hopes are not high for this holiday season-NRC urges verification that a given charity is qualified by the IRS. To find out go to this IRS link. To make sure the charity is legitimate and worthy, NRC also suggests visiting the following Web sites: the American Institute of Philanthropy at, and


The Dow Jones Private Equity Analyst Outlook Conference, a forum for private equity power players and deal makers to assess the opportunities, risks, and challenges the industry will face in the coming year, will be held January 25 & 26 in New York City. For further information and to register go to or call 866-291-1800.

Upcoming events sponsored by BNY Mellon Alternative Investment Services include the BNY GAIM USA Conference in Boca Raton, Fla., January 18 to 20, and the PEI International CFOs and COOs Forum in New York City, January 20 & 21. For information go to

RMB Rising 2011, sponsored by FinanceAsia and AsianInvestor, slated for January 25 at the Grand Hyatt in Singapore, will explore "RMB liberalization and what it means for the region." For information, e-mail [email protected].

On The Move

The Foundation Center, a New York City-based resource for philanthropy worldwide that was established in 1956, has elected Clotilde Perez-Bode Dedecker to its board of directors, effective in July. Dedecker is president and CEO of the Community Foundation for Greater Buffalo, and has founded and led numerous collaborative initiatives with the goal of eliminating gender-based inequities for women.

American General Benefit Solutions, a business unit of American General Life Companies, has hired Evan Pietrangelo as director of producer marketing. Pietrangelo was previously a district general agent with Colonial Life Insurance Company in Columbia, S.C., and has also worked at Reliance Standard Life Insurance Company, Ethicon/Johnson & Johnson and Cigna Corp. Pietrangelo will be based out of Benefit Solutions' office in Neptune, N.J.

The BNY Mellon Wealth Management regional office in Miami, which recorded year-over-year sales growth in Florida of 20%, is relocating to larger quarters at 1450 Brickell and plans to add more staff.

WealthTouch, a Denver-based independent financial reporting platform for ultra-high-net-worth families and their advisors-including private banks and family offices-has hired Daniel C. Green as managing director of Western Territory Sales, which handles sales and consulting for firms in the Western U.S. and Asia. Green has held sales positions at Investment Scorecard and Advent, which acquired GreenTrak, the wealth reporting service he started in 1995.

Triad Advisors Inc., Norcross, Ga., has hired Chris Mielnicki as vice president of business development, responsible for recruiting new advisory firms and experienced advisors. Mielnicki was a partner at Advisor Placement Group. Triad has also promoted long-time employee Craig Smith to senior vice president, technology. Triad Advisors, an independent broker-dealer and RIA with over 500 independent advisor affiliates, is a subsidiary of Ladenburg Thalmann Financial Services Inc.

Dynasty Financial Partners, a private wealth manager, has transitioned to an independent open architecture platform, which the firm believes will enable its advisors to better serve their high-net-worth-clients. Dynasty has hired Michael C. Brown as partner and director of wealth management. He previously was a managing director and wealth advisor at U.S. Trust, Bank of America/Merrill Lynch's Private Wealth Management Division. Accompanying Brown are key members of his former wealth management team, including Charles Britton, who joins Dynasty as a partner.

-Cort Smith