By Jerry Love, Louisiana Baptist Foundation
ALEXANDRIA (LBF) – Trustees of the Louisiana Baptist Foundation received positive investment reports and upbeat updates about operations during a regular quarterly business meeting held July 30 in the Louisiana Baptist Building.
They also received news of the pending retirement of Executive Director Wayne Taylor. He told the board that he has not set a specific date to retire, but “it would be no later than next summer.
“I have spoken with board officers prior to the meeting and will be working with them to determine a strategy for hiring a new executive director,” said Taylor, who has led the Foundation since 1995.
POSITIVE SECOND QUARTER
Every portfolio component had earned a positive return for the second quarter, with almost all sectors exceeding their benchmarks.
Lee Morris of Graystone Consulting reported fixed income portfolios continued to perform in line with expectations, adding his observation that this sector is heavily dependent on what the Federal Reserve will do with interest rates for the rest of the year. Presently rates are expected to be flat or trend slightly down.
The alternative investment allocation of the LBF portfolio (preferred stocks, convertible securities, MLP’s, covered calls and infrastructure) continued to show strong positive growth in all areas, Morris said. Only one segment, infrastructure, failed to exceed its benchmark, missing by several percentage points, despite returning over 14 percent in the first half of the year.
The alternative mix continues to add value and diversity to the total portfolio.
Both domestic and international equities performed well for the first half of 2019, Morris noted.
He also said Morgan Stanley’s analysts continue to project that international stocks will perform better than domestic equities over the next several years. Each of these components of the LBF portfolio is outperforming its respective benchmark with domestic equities showing more than a 19 percent return for the year.
Analysts expect a softening in the equity markets but are expecting them to finish the year well, according to Morris. Election years typically generate positive returns in the stock markets, he added.
For Q2 2019 the LBF portfolio produced the following returns:
— Short Term Fund: 2.0 percent current annualized yield as of June 30, 2019;
— Group Investment Fund, comprised of various market sectors: 12.28 percent total return;
— Diversified Income Fund, conservative income-oriented fund: 4.59 percent total return.
In other reporting, Chuck Murray, LBF controller, reported a net surplus in the operating budget for the second quarter of the year.
The surplus comes from expenses being lower than projected so far this year, he said.
He also said he expects cost recovery fees will continue to provide stable income through the year end and sees a good finish for the year’s budget.
Jerry Love, planned giving director, reported that two of three estate successions that have been in process have been completed. The third is well on its way to completion with only property remaining to be sold, he said.
Love and Jeremy Waters, LBF regional executive, told trustees two different promotional videos are being filmed which will help people understand the services offered by the Foundation. Trustees received an update about a website design that will offer more information and take advantage of social media to communicate with the public.
Taylor and Murray reported there has been progress on the accounting system upgrade. Current testing and feedback to the contractor of the new software (U.S. Computers of Lafayette) should allow the program to go live by the beginning of 2020.
The updated software will provide additional long-term data security and offer a platform for expanded services to the Foundation’s clients in the future.
The board also approved investment parameters stating that “investments with liquidity constraints could not exceed 8 percent of investments” of the LBF portfolio. The approved parameters would allow Taylor and Morris to develop a strategy for investing with a private equity manager.
Trustees accepted and approved unanimously the annual audit report from Evelyn Renfrow of Payne, Moore and Herrington, LLP.
The next trustee meeting is scheduled for October 29, 2019.
The Louisiana Baptist Foundation assists individuals with gifts that benefit Louisiana Baptist churches and ministries, and to assist Baptist churches and entities with financial management. 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.