Parametric Wins ESG, Low Volatility Mandate from The McKnight Foundation
SEATTLE, February 7, 2018 –Parametric Portfolio Associates LLC (Parametric) announced today The McKnight Foundation has selected Parametric to manage a customized environmental, social and governance (ESG), low volatility portfolio of approximately $60 million. The mandate is part of the Foundation’s alternative/hedge fund allocation and the first time McKnight is exploring liquid alternatives. This mandate builds on others given to Parametric by institutions that desire an ESG portfolio customized to align with their investment goals and missions.
Rick Scott, vice president of finance and compliance at The McKnight Foundation, said, “Three years ago, we made a fundamental decision to change our investment approach with the goal of investing 10 percent of the endowment, or $200 million, in a range of assets that reduce carbon emissions and promote sustainable growth. This commitment has reverberated throughout the portfolio, and we are now taking additional steps to align more of our endowment with our mission. In fact, more than $1 out of every $5 is aligned.”
The Foundation’s custom portfolio aims to provide exposure to companies exhibiting stronger ESG characteristics than average covering a broad range of macro-level ESG issues, while providing greater risk control than might be available in comparable indices. Of the various ESG issues considered in the portfolio, it was paramount to avoid holding companies that own thermal coal. The portfolio seeks to produce favorable risk adjusted performance through the systematic sale of fully collateralized index option positions.
Jack Hansen, Chief Investment Officer at Parametric, said, “We are honored The McKnight Foundation chose us as its investment partner to help them meet their mission and investment objectives. Foundations are increasingly seeking to invest for impact, and Parametric is proud to be among the leaders in designing customized portfolios that fulfill their needs.
“Typically, as a client works to build the ‘right’ alternative portfolio, a good fund manager can help balance the dual goals of risk diversification and mission goals. This is where Parametric’s team, technology and data power provide the information and transparency needed to achieve both goals."
About The McKnight Foundation
The McKnight Foundation seeks to improve the quality of life for present and future generations. Program interests include regional economic and community development, Minnesota’s arts and artists, education equity, youth engagement, Midwest climate and energy, Mississippi River water quality, neuroscience research, international crop research, and rural livelihoods. The primary geographic focus is the state of Minnesota, with significant support also directed to strategies throughout the U.S. and in Africa, Southeast Asia, and Latin America.
Founded in 1953 and independently endowed by William and Maude McKnight, the Minnesota-based family foundation had assets of approximately $2.2 billion and granted about $87 million in 2016.
Learn more at mcknight.org.
Parametric, headquartered in Seattle, WA, is a leading global asset management firm, focused on the delivery of transparent, customized portfolio solutions, including rules-based, alpha-seeking equity, alternative and options strategies, as well as implementation services including custom core equity, futures overlay and centralized portfolio management. Celebrating its 30th anniversary this year, Parametric managed approximately $230.1 billion in total assets as of December 31, 2017. Parametric is a majority-owned subsidiary of Eaton Vance Corp., and its principal investment centers are located in Seattle, WA, Minneapolis, MN, and Westport, CT, and Australia.
For more information about Parametric, visit parametricportfolio.com.