By Jerry Love, LBF Communications
ALEXANDRIA — The Louisiana Baptist Foundation Board of Trustees met at the Louisiana Baptist Building July 26 for their third quarterly meeting of the year with the morning dedicated to meetings by the investment committee and operating committee and the afternoon spent in general session by the entire body to consider committee reports and other business.
Lafayette’s Jim Prince, who chaired the morning meeting of the Investment Committee, called on Lee Morris of Graystone Consulting, the LBF’s investment consultant, to give the quarter’s update on the investment managers and market conditions.
Morris noted the following market conditions as considerations for the context of his report:
— US domestic equity market was the only positive performer for the past 12 months. All others around the world were negative.
— Entering 2016 analyst expectations were interest rates would rise and fixed income portfolios would struggle as a result. The opposite has happened. Rates have dropped and the fixed portfolios have delivered excellent returns.
— After six years of underperformance versus developed markets, emerging markets are starting to deliver the best performance. The firm’s Global Investment Committee thinks this may be the beginning of a long term move.
— Reminded the board that the first year with a new president is historically difficult for the markets.
Morris reviewed the individual managers with the board and made the recommendation to terminate Snow Capital due to underperformance. The money under Snow’s management would be allocated to other equity managers. The LBF employs a total of 19 managers in various segments of the markets.
The second quarter saw a decrease in net assets under management.
Barbara Bell, CPA and controller for the Foundation, reported the outflows were a result of several larger entities withdrawing funds they had accumulated to use for projects this year. Assets under management as of June 30, 2016, were $164,618,052, a decrease of approximately $3.2 million for the quarter.
Investment returns for the major components of the LBF portfolio were reviewed by Jim Prince, who reported the following data for March 31, 2016:
— Short Term Fund: 0.56% Annualized Yield
— Group Investment Fund, comprised of various market sectors: 1.44% total return
— Diversified Income Fund, conservative income-oriented fund: 2.90% total return.
The Investment Committee also approved management policies for the Convertible Securities Fund and the Managed Futures Fund. Both funds were added to diversify the overall portfolio of the LBF.
Columbia’s John Carroll, chairman of the operating committee, reviewed the operating budget which continues to reflect a surplus through the first two quarters. Revenue was still ahead of expectations while expenses have been held in check.
Jerry Love, planned giving director, reported on several new gifts received during the second quarter. Gifts for the period were mainly in the form of donor advised funds that will be used by the donors to direct gifts to a Baptist ministry. He also reported on the promotional strategy implemented earlier this year called Give-A-Gift.
The Foundation gives $1,000 each month in 2016 to a Louisiana Baptist Church or ministry selected at random from submissions by Louisiana Baptists. The May and June recipients selected Louisiana Baptist Children’s Home and Philadelphia Baptist Church in Deville, respectively.
Several changes to the personnel manual were proposed, prompted by a review due to hiring a new employee, accord ing to LBF Executive Director Wayne Taylor. References were deleted to a pension plan that no longer exists, travel reimbursements were tightened and other benefits were clarified, he said.
During the afternoon, Board President Julian Johnston of Calhoun led a review of the information presented by the Investment and Operating Committees in earlier sessions, and the board subsequently approved recommendations to terminate Snow Capital Management and reallocate assets with them to the other managers employed by the Foundation. Trustees also agreed to the personnel manual amendments.
The board also interviewed and approved the hiring of Chuck Murray of Alexandria as the new CPA and controller for the Foundation.
Taylor described Murray as having a strong background in accounting with experience in public utilities as well as healthcare and construction industries, and he said Murray would work alongside Barbara Bell, the current controller, until her retirement next year.
The Louisiana Baptist Foundation was established in 1944 to encourage and assist individuals with gifts in support of Louisiana Baptist churches and ministries, as well as provide asset management for the churches and institutions affiliated with the LBC.
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.
The next LBF trustee meeting is scheduled for October 25.