The endowment came to us with a familiar problem: a global equity book built from legacy manager relationships that had quietly underperformed its benchmark for most of a decade.
Our review began with performance attribution — separating genuine alpha from factor exposure the client could have owned more cheaply. Roughly two-thirds of the active risk was being paid active fees for benchmark-like exposure.
We rebuilt the structure around a low-cost core, retained the two managers whose edge survived scrutiny, and added a dedicated diversifying allocation sized to the endowment's spending needs.
The transition was sequenced over nine months to manage costs and market impact, with the new benchmark embedded in each manager's reporting requirements from day one.
Twelve months on, the redesigned book has outperformed its benchmark while carrying lower total fees and a more defensible structure for the investment committee.
Key takeaways
- Legacy manager structures often hide years of quiet underperformance
- Attribution analysis revealed benchmark-like exposure at active fees
- Core-satellite redesign cut costs and clarified accountability
- Transitions were staged to control implementation cost