The Calgary Foundation’s transition from a heavy domestic public market asset mix to a diversified portfolio opened the doors to a larger investible universe and minimized volatility, said Jessica Mitchell, an investment associate at the organization, during a session at the Canadian Investment Review’s 2025 Endowment & Foundation Investment Forum.

“The questions that we asked ourselves were, how do we reduce draw down risk, add diversification and position the portfolio to meet its return objective?”

The organization is supporting charitable efforts through its $1.4 billion endowment fund and granted more than $75 million to more than 1,200 charities in 2024. In the past 70 years, it gave out more than $900 million to local organizations.

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The Calgary Foundation decided to change its allocations following the global financial crisis of 2008, when its portfolio was close to a standard 60/40 split. Its five per cent spending target felt untenable, said Mitchell, since bonds were earning fewer than one per cent at the time.

The endowment model allowed the organization to explore a larger allocation to illiquid assets due to low annual cash obligations and perpetual time horizons compared to bonds. In 2013, it began investing in real assets and private equity following a recommendation to reduce public market securities.

The organization has outperformed five out of nine rolling four-year periods with lower standard deviation from 2018 onwards. Over the 12-year period, it outperformed the asset mix before the global financial crisis by 1.2 per cent. “In our experience, the portfolio is less responsive to big public market shifts. During market rallies, the portfolio might not respond as dramatically, but the same is also true in down markets.”

Alternative assets enhanced relative performance and aid in capital preservation during a market sell-off, said Mitchell, noting alternatives carry different risks compared to public assets and require greater internal capacity to oversee. “For us, we think that trade-off has been worthwhile.”

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Comparing the portfolio’s performance relative to its asset mix before the financial crisis reveals a decline in both upside and downside capture, she said, adding it’s a function of having a more diversified portfolio with an expected lag to big public market rallies. However, the portfolio preserved capital in falling markets by not retreating as much as it would have before its big allocation change.

Developing the proper asset mix to include private investments demands a serious time commitment, noted Mitchell, since it requires diversification across vintage years, general partners and strategies.

“By diversifying on the public side and investing in alternatives, we are expanding the breadth and depth of our investible universe.”

Read more coverage of the 2025 Endowment & Foundation Investment Forum.