Handbook for Investment Committee Members: How to Make Prudent Investments for Your Organization »

RUSSELL L. OLSON, a consultant on institutional investing, retired in 2000 as the director of pension investments worldwide for Eastman Kodak. He had overseen Kodak's pension funds since 1972. Over the last thirty years, Olson also worked with a range of endowment funds. He was named one of America's nine best pension officers by Institutional Investor magazine in 1987 and was Investment Management Institute's first Plan Sponsor of the Year in 1993. Olson is also the author of The Independent Fiduciary: Investing for Pension Funds and Endowment Funds, also published by Wiley.

Whether you're a member of the investment committee of an endowment fund—for a college, hospital, or local civic group—or a member of the investment committee of a pension fund or foundation, the bottom line is that you've been entrusted with making investment decisions that, within an acceptable level of risk, should maximize the long-term growth of income for your fund and organization.

With over thirty years of hands-on experience and proven success in the financial field, author Russell Olson—the former director of pension investments worldwide for Eastman Kodak—understands the many fiduciary responsibilities of those who sit on the investment committees of endowment funds, foundations, and pension funds. In The Handbook for Investment Committee Members, Olson shares his extensive knowledge of this subject so that you can learn how to fully meet the demands of this important job.

Filled with in-depth insights and practical advice, The Handbook for Investment Committee Members will help you to understand information presented at committee meetings, ask meaningful and productive questions, evaluate the responses received, and vote on recommendations knowledgeably. Using the tools and techniques described, you'll be prepared to make even the toughest decisions with confidence.

The Handbook for Investment Committee Members offers clear, accessible guidance for both sophisticated investors and relative newcomers. It breaks down and discusses some of the most critical issues in this field, including:

• The proper functioning of investment committees and the drafting of investment policies
• Creating a portfolio of asset classes and understanding the elements of risk, return, and correlation
• Selecting and monitoring investment managers or mutual funds that actually invest your assets
• Evaluating the investment organization of an endowment fund, foundation, or pension fund
• The structure of an endowment fund, the handling of restricted money in the fund, and the importance of using the imputed income method to calculate annual payments to the fund's sponsor
• The similarities and differences in managing an endowment fund, foundation, and pension fund

Today, the responsibilities of investment committee members are tremendous. If you're currently in this position or planning on being there soon, pick up The Handbook for Investment Committee Members and find out how you can make prudent investments for your organization.

Introduction.

Organization of this Book.

CHAPTER 1: The Investment Committee.

Standards to Meet.

Committee Organization and Functions.

Interaction of Committee and Adviser.

Social Investing.

In Short.

APPENDIX 1: Example of an Investment Committee's Operating Policies.

CHAPTER 2: Risk, Return, and Correlation.

Return.

Risk.

Correlation.

Risk-Adjusted Returns.

Derivatives—A Boon or a Different Four-Letter Word?

In Short.

CHAPTER 3: Setting Investment Policies.

Time Horizon, Risk, and Return.

Policy Asset Allocation.

Preparing a Statement of Investment Policies.

In Short.

CHAPTER 4: Asset Allocation.

Characteristics of an Asset Class.

Asset Classes.

Putting It All Together.

In Short.

CHAPTER 5: Alternative Asset Classes.

Liquid Alternative Assets.

Illiquid Investments.

Private Asset Classes.

In Short.

CHAPTER 6: Selecting and Monitoring Investment Managers.

Three Basic Approaches.

Criteria for Hiring and Retaining Managers.

Hiring Managers.

Retaining Managers.

In Short.

CHAPTER 7: The Custodian.

Custodial Reporting.

Management Information.

In Short.

CHAPTER 8: Evaluating an Investment Fund's Organization.

Investment Objectives.

Asset Allocation.

The Fiduciary Committee.

The Adviser.

Investment Managers.

CHAPTER 9: Structure of an Endowment Fund.

The Total Return, or Imputed Income, Approach.

"Owners" of the Endowment Fund.

In Short.

APPENDIX 9: The Total Return or Imputed Income Method.

CHAPTER 10: What's Different about Pension Funds?

Pension Plan Liabilities.

Investment Implications.

In Short.

CHAPTER 11: Once Again.

Glossary.

Bibliography.

Index.

About the Author.