American Red Cross hires Cambridge to manage two investment pools

 

  • Total assets: Red Cross has two investment pools totaling $3 bln
  • PE allocation: Invests in mid-market and small cap buyouts and secondaries
  • Why is this important: Smaller funds and foundations are hiring OCIO’s instead of managing investments in-house

 

American Red Cross hired Cambridge Associates to manage its investment portfolio after a search of almost six months.

Cambridges team will work to reduce risk in the pension fund and manage the endowment to maximize growth over the long term, Red Cross said in an email to Buyouts.

Red Cross didn’t provide specific details of how Cambridge will work with the portfolio, including the private equity program.

In December, Red Cross said it was eliminating the in-house investment office and would begin searching for an outsourced chief investment officer.

CIO Greg Williamson, who had joined the Red Cross in 2015, quit at the time.

American Red Cross has two distinct pools of investment: the ERISA-regulated defined-benefit pension plan and the endowment. Cambridge will deploy two teams to handle the portfolio, the non-profit said in the email.

The two pools have assets of more than $2.5 billion.

The pension fund totaled $1.53 billion as of June 30, 2017. PE and debt accounted for almost 12 percent of the total portfolio at $191.5 million, the organization’s annual report shows.

The endowment was $1.05 billion as of that date, the Form 990  showed. Alternative investments including PE, real estate royalty and energy funds accounted for 6 percent of the total portfolio.

The Red Cross PE portfolio includes mid-market and small-cap buyouts and early- and late stage venture capital, as well as secondaries.

University of Louisiana at Lafayette Foundation in May hired Cambridge to manage its $170 million portfolio.

Action Item: Read more on American Red Cross’s financials here https://bit.ly/2LBd2A3