Oxcel, Part of the Solution Colin Cheng Thomas Saleh Marko Tvrtkovic Beatrice Yeung.

Oxcel, Part of the Solution

Colin Cheng Thomas Saleh

Marko TvrtkovicBeatrice Yeung

Introduction Analysis Recommendation Conclusion

Agenda• Introduction

• Problem Statement

• Situational Analysis

• Criteria Definition

• Alternatives

• Recommendation

• Conclusion

• Questions and Answers

Introduction Analysis Recommendation Conclusion

Problem Statement

• Should Oxcel devote their funds to socially responsible investing, if so, which investment option should the endowment support, given the financial limitations?

Introduction Analysis Recommendation Conclusion

Situational Analysis

• Full consideration of all three pillars – Environmental, political, socio-economic

• Ecology as a framework for social existence

Pol

itica

l

POLITICAL

VALUES TO BE INTERGRATED WITH RESPONSIBLE INVESTING

Introduction Analysis Recommendation Conclusion

Criteria Definition

• Intergenerational Equity – Future generations should have the same access to

resources and ecological services that current generations enjoy

• Modes of Development – Based on shared prosperity and environmental

protection

Giving voice to the voiceless – the unborn

Introduction Analysis Recommendation Conclusion

Alternatives - Funds

1. Abbe SRI• Not 100% aligned with socially responsible investing

2. Winslow Green Growth• Theme based approach to investing• Focus on domestic, small-cap companies

– High risk, high reward– More adaptable– More direct impact

• Green Mountain Coffee

Introduction Analysis Recommendation Conclusion

Alternatives - Funds

3. Calvert Social Investment Equity Fund• Triple bottom line approach• Focus on domestic, large-capitalization companies• More diversified investment portfolio

– Lower risk– Multi-facetted investment process

• Holdings:– Pharmaceuticals and smaller companies such as Ecolab or

the Vermont Sustainable Jobs Fund

Introduction Analysis Recommendation Conclusion

Alternatives – Decision Matrix

Funds/Criteria Performance Values Managers Structure

Abbe SRI + 0 - -

Winslow Green Growth

0 ++ + -

Calvert Social Investment

Equity+ +++ ++ ++

Introduction Analysis Recommendation Conclusion

Recommendation: Why Calvert?

• The structure of the Portfolio– Diversity – Aligns with Goal of the Endowment – Best Encapsulates our definition of Sustainable Investing

• Performance relative to Other Funds– Best Previous Performance Performance:

Lower Volatility (Variance 1.5 compared to 7.3)

• Performance relative to Benchmark– Outperforms S&P 500

Introduction Analysis Recommendation Conclusion

Fund Performances

October 2006- September 2007 October 2007- September 2008 October 2008- September 2009

-4

-3

-2

-1

0

1

2

3Year by Year Performance

Calvert

Winslow

Abbe

Introduction Analysis Recommendation Conclusion

Calvert versus S&P 500

October 2006- September 2007 October 2007- September 2008 October 2008- September 2009

-2.5

-2

-1.5

-1

-0.5

0

0.5

1

1.5

Year by Year Performance

CalvertS&P 500

Introduction Analysis Recommendation Conclusion

Fund Manager & Future Outlook

• Fund Manager– Experience: Richard England (MBA 20+ years of experience)

William Hackney III (Employee since 1995, MBA)

– Total Exp. Ratio = 0.67% – Advisor Fee = 0.60% – Turnover Ratio = 51%

• Future Outlook – Calvert’s Approach: Best Captures the multi-faceted approach to

sustainability– Market Uncertainty

Introduction Analysis Recommendation Conclusion

Further Reasoning• Transparent and Accountable

– Corporate environmental, social and governance disclosure (on both

policy level initiatives and company engagement)

• Multi-dimensional – Incorporates political, socio-economic, and environmental pillars

• Inclusive – Governance and Ethics, Workplace, Environment, Product

Safety and Impact, International Operations and Human Rights,

Indigenous Peoples’ Rights, and Community Relations

Introduction Analysis Recommendation Conclusion

Further Reasoning

• Mobilize resources; Connect with stakeholders – Engage companies to improve behavior

• Innovative – Identify new untapped opportunities with potential

Transitions corporate culture to one that finances the

future

“Be Part of The Solution”

Introduction Analysis Recommendation Conclusion

Recommendation & Innovation

Invest in Socially Responsible Entrepreneurship

• Inline with Values– Investing in Local Human Capital– Gives Younger Students a Voice– Financing Future Generations

• Minimize “Principle-Al agent”– Students have vested interests and are motivated

Introduction Analysis Recommendation Conclusion

Conclusion

Sustainability can be profitable

Aligning with your valuesCommon Opinions

Redefine Responsible Investing

Invest in Green Funds

Invest in Ideas of the Future

Introduction Analysis Recommendation Conclusion

Questions and Answers