THE FOLLOWING IS CONFIDENTIAL INFORMATION THAT IS PROVIDED TO YOU FOR GENERAL INFORMATION. IT DOES NOT CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES IN THE MISSION DIOCESE FUND.
The stock market turmoil in 2008 subjected Mission Dioceses to significant volatility and losses to their endowments. Based on the concern raised at the Mission Bishop Conference in the fall of 2008, Catholic Extension surveyed their investment needs, especially regarding long-term assets. The findings indicated that most dioceses had limited investment options and incurred high fees due to relatively low investment balances. Mission Bishops and CFOs asked Catholic Extension to address this situation, as management of these investments directly affected their financial viability in the long-term. As a result, Catholic Extension formed a pooled investment fund on behalf of the Mission Dioceses, named the Mission Diocese Fund ("Fund"), to invest long-term assets such as endowments. The rationale was that assistance with investment management would allow dioceses to focus their scarce resources on fundraising and stewardship, thereby building greater capacity for long-term financial viability.
The Mission Diocese Fund, LLC is a limited liability company where the Mission Dioceses and associated organizations are the Members and Catholic Extension serves as Manager. The risk to each Member is limited to its pro rata share of ownership of the Fund. Governance is through the Chancellor and the Investment Committee of Catholic Extension. The offering of interests in the Fund is not subject to securities laws because of exemptions for entities such as the Fund that are organized and operated exclusively for charitable purposes. The eligible Members can only be Mission Dioceses and those organizations associated with Mission Dioceses that are exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code. Without this structure and the securities law exemptions, it would not have been possible for Catholic Extension to provide this unique opportunity to Mission Dioceses.
The Fund’s Operating Agreement provides various services through Catholic Extension, thereby subsidizing some of the costs of the Fund. The investments primarily mirror those of Catholic Extension’s $120 million portfolio (See Figure 1). Cambridge Associates, the investment consultant, has a long, successful track record of advising large endowments on asset allocation strategies that allow portfolios to grow over the long-term while providing income to fund mission objectives. September 30, 2015, (See Figure 2) is keeping pace with the policy benchmark over the longer-term.
Note: Performance is calculated by Cambridge Associates and is based on preliminary returns reported by the fund managers. Past performance is no guarantee of future results. All investments involve risk.
By pooling assets, the Fund can invest in world-class fund managers that are otherwise closed to smaller portfolios, such as:
- First Eagle
- Fir Tree
- State Street Global Advisor
- William Blair
The Fund applies the USCCB Socially Responsible Investing guidelines in its investment decisions.
To emphasize that this represents a service from Catholic Extension to the mission dioceses, the Fund’s annual “all-in” expenses are capped at 0.55% of the asset balances (thereby increasing stated returns at least 0.50%). Investments may be contributed at the start of each quarter, and distributions are made at the end of each quarter.
- Cambridge Associates, LLC
- State Street Corporation
- Deloitte & Touch, LLP
- MSCI, ESG Research
- NRS, Trust Product Administration
For More Information
Kevin McGowan, Chief Financial Officer, at 312.795.5133 or email@example.com
Bobbi Hanigan, Manager of Diocesan Initiatives, at 312.795.6047 or firstname.lastname@example.org