By Jerry Love, LBF Communications
ALEXANDRIA – Positive economic news, a significant increase in assets, continued progress in a software upgrade and a reception for retiring LBF controller Barbara Bell highlighted the quarterly meeting of the Louisiana Baptist Foundation Board of Trustees meeting April 25.
E.L. Paulk, trustee from Deville, chaired the morning meeting of the investment committee and had Lee Morris, Investment Consultant with Graystone, give an update on the performance of the LBF portfolio
According to Morris, active management is beginning to see traction versus passive management following the 2016 election and thus far in 2017. The overall portfolios are doing well. The expectation is domestic equities along with developed international equity will continue to perform well through the remainder of the year.
Fixed income will continue to present a challenge in the current rate environment with this segment of the portfolio performing in line with expectations. The Federal Reserve has indicated it may raise rates two or three times by year end.
Alternatives allocation, which includes smaller investment allocations in preferred stock, convertible securities and other types of securities, is performing well and adding value at both the performance and diversification level.
Fielding questions from the board, Morris was asked about earlier signs of recession, he said, “those signs have been pushed down. Economic indicators at this time are not pointing to recession before the latter part of 2018.”
The investment returns for the major components of the LBF portfolio for the first quarter of 2017 were as follows:
— Short Term Fund: 0.70% Annualized Yield
— Group Investment Fund, comprised of various market sectors: 3.92% total return.
— Diversified Income Fund, conservative income-oriented fund: 1.21% total return.
In reviewing the Foundation’s financial positions for the first quarter of 2017, Barbara Bell, CPA and LBF controller, reported assets under management were $169,764,480. This is an increase of approximately 4.6 million dollars in the first 3 months of the year.
She noted much of this change came as a result of positive market movement. Jerry Love, director of planned giving, reported new contributions of approximately $789,000 reflected in the net increase of the assets.
The committee agreed with Morris’ recommendations to:
- Increase the allocation to passive in the Domestic Equity portfolio;
- Terminate Abbey Capital Managed Futures and to add those funds to International Equity allocation;
- Move up to $1 million from Infrastructure to International or Domestic Equity.
Because these actions are within the policies set by the Board, no motion or official action was necessary.
Executive Director Wayne Taylor updated the operating committee, chaired by John Carroll of Columbia, on the progress of the new accounting system.
The upgrade to a new platform for the Pooled Accounting System (PAS) is moving along well with the staff having already begun testing.
Negotiations for transferring the upgraded PAS to a third party vendor are underway, with contract review being conducted by Jay Bolen, the LBF’s legal advisor. Once completed, the transfer would assure the Foundation would have a well-supported accounting software system at an economical cost for many years. The existing version of PAS has been in use for 18 years and is no longer supported.
Taylor and Love also reported on their ongoing efforts to increase the knowledge of the LBF and to remind pastors of targeted Baptists associations the benefits of encouraging Estate Stewardship among their members.
Several video clips produced by another state foundation were shown to the committee. The LBF is hoping to utilize generic versions of the videos to assist with promotion of Estate Stewardship and Estate Planning that includes gifts to Baptist churches and ministries.
Chuck Murray, the Foundation’s CPA, in his review of the operating budget for the first quarter said there was a net surplus so far in 2017. According to Murray, income received thus far from the Cooperative Program and cost recovery is ahead in both budgeted categories. Also, some fees related to the accounting software have been lower than expected.
During the afternoon, Board President Waymond Warren, West Monroe, led a review of the information presented by the Investment and Operating Committees in earlier sessions. There were no actionable items reported.
In his director’s report, Taylor reiterated his excitement with the progress of the accounting software upgrade.
The meeting concluded with board members honoring Bell, who is retiring at the end of June after 27 years as the Foundation’s CPA/Controller. Following the meeting the trustees hosted a reception to honor her for her many years of dedicated service.
The next meeting for the Louisiana Baptist Foundation Trustees is scheduled for July 25, 2017.
To learn more about the work and ministry of the Foundation, to review investment returns for its managed funds, or to see a list of current trustees, go to www.LBFinfo.org.