SOURCE: Cambridge Associates

Cambridge Associates

September 05, 2012 08:45 ET

Cambridge Associates Works to Increase Number of Hedge Funds With Socially Responsible Investing Screens

Many Non-Profit and Religious Institutions Have Been Missing Out on Hedge Funds, and Hedge Funds Are Missing Out on Pools of Major Investors

BOSTON, MA--(Marketwire - Sep 5, 2012) - A lack of hedge funds employing socially responsible investment (SRI) screens has created an opportunity deficit -- for hedge funds themselves, as well as for religious and other institutions that wish to extend their values to their investment programs.

In response, Cambridge Associates, the investment consultant to endowments, foundations, pensions and other institutional and private investors, is spearheading efforts on behalf of clients to deepen the pool of attractive hedge funds with SRI screens. 

"Investors with SRI guidelines need not necessarily compromise access to institutional quality fund managers and the attractive risk and return characteristics they bring to portfolios," said Jessica Matthews, Associate Director of Mission Related Investing at Cambridge Associates.

"For years, a number of our clients have been applying SRI principles in their traditional stock and bond investments by screening out certain securities. However, alternative assets like hedge funds have thus far been the hold-outs, and therefore compliance with SRI policies has often resulted in excluding hedge fund investments altogether," she added, "or required an uneasy compromise by excluding hedge funds from SRI scrutiny." 

The SRI hedge fund initiative at Cambridge Associates doesn't necessarily involve creating new hedge funds or significantly altering existing ones. Rather, Cambridge works with the hedge fund to create a separate share class that excludes securities that are screened out based on SRI guidelines. Cambridge asks hedge fund managers interested in creating an SRI share class to audit their portfolios against a list of restricted securities. The audit ensures that a screened class is reasonable from a portfolio management perspective and would not materially deviate from the performance of the main fund. 

Through a better understanding of clients' needs and sharing of best practices on how these screens can be implemented, many hedge fund firms have become receptive to the idea. Cambridge can now actively recommend to clients a diversified array of hedge funds implementing SRI screens. The firm is in discussions with additional managers and welcomes outreach from other managers interested in tapping into the market of institutions with SRI requirements.

Cambridge Associates has nearly 100 professionals dedicated to providing advice, research and performance reporting services related to hedge fund investing, and its Mission-Related Investing Group has 16 professionals.

About Cambridge Associates

Founded in 1973, Cambridge Associates is a provider of independent investment advice and research to institutional investors and private clients worldwide. Today the firm serves over 900 global investors, including 90 faith-based institutions. Cambridge Associates delivers a range of services, including investment consulting, outsourced portfolio solutions, research services and tools (Research Navigator(SM) and Benchmark Calculator), and performance monitoring, across all asset classes. The firm has more than 1,000 employees based in seven global offices in Arlington, VA; Boston; Dallas; Menlo Park, CA; London; Singapore; Sydney; and Beijing. For more information about Cambridge Associates, please visit www.cambridgeassociates.com.

About Cambridge Associates' Mission-Related Investing Group

The Cambridge Associates' Mission-Related Investing Group was formed in 2008 to help the firm's clients participate in the rapidly emerging arena of mission-related and socially-responsible investing. The group helps clients create carefully crafted mission-related investing plans and maintains a detailed database of managers in the mission-related investing universe. It also helps define best practices for institutions embarking on mission-related investing programs.

Contact Information