Boston, MA – FCLTGlobal, a not-for-profit organization whose mission is to focus capital on the long term to support a prosperous and sustainable economy, today released new research on the importance of the process and terms for hiring investment managers. These terms make a difference to the broader economy by providing incentives for investor engagement with companies, especially given the increased emphasis on sustainability in the investment industry.

The report expands on FCLTGlobal’s prior work on long-term mandates between asset owners and asset managers, and features updates to the Long-Term Model for Institutional Investment Mandates, including new recommended terms and KPIs.

Asset owners’ assets are often invested by external managers who may have different time horizons, incentives, and goals. Since 2015, FCLTGlobal has conducted research to help asset owners and asset managers construct mandates that prioritize long-term goals and safeguard investors’ savings and strategies well into the future.

Institutional Investment Mandates: Anchor for Long-term Performance, 3^rd Edition follows prior editions published in 2017 and 2020. The report offers a starting point for asset owners and managers to define mandate terms that build trust and alignment.

“The investment mandate is the foundation for every asset owner – asset manager relationship. Ensuring that it reflects a long-term outlook is vital. That’s the reason we’ve returned to this area of research for a third time,” said Sarah Keohane Williamson, FCLTGlobal’s Chief Executive Officer. “The updated recommendations reflect how the industry has shifted over the past seven years, and how the relationships between owners and managers need to shift as well.”

The report includes several other tools meant for practical use by asset owners in the mandate process, such as:

• Template Statement of Purpose and Responsibilities for Investors: An example statement on return objectives, risk tolerances, and accepted investor responsibilities that could impact how returns are expected to be earned.
• Due Diligence “Top Ten” List: A list of questions to help asset owners select managers that are capable of investing over the long term and achieve alignment around beliefs on long-term value creation.
• Asset Manager Scorecard: A scorecard to provide a consistent method to evaluate a manager’s performance on an ongoing basis.

The project incorporates perspectives from FCLTGlobal’s many institutional investor members, and includes examples of real-world cases of long-term mandates from the following organizations:

• Future Fund
• GIC
• Kempen Capital Management
• MFS Investment Management
• New Zealand Superannuation Fund
• Ontario Teachers’ Pension Plan
• Wellington Management Company

To learn more, visit www.fcltglobal.org/resource/mandates.

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About FCLTGlobal

FCLTGlobal’s mission is to focus capital on the long term to support a sustainable and prosperous economy. We are a non-profit organization whose members are leading companies and investors worldwide that develops actionable research and tools to drive long-term value creation for savers and communities. Please visit www.fcltglobal.org to learn more.

Media Contact

Ross Parker, r[email protected], +1 508 667 5451