Asset Management

When the Foundation received the amount of $1.4 billion from the Chagnon family towards the end of the year 2000, the Foundation's Board of Directors (the "Board") established an Investment Committee with the mandate to recommend an Investment Policy (the "Policy") and supervise its implementation.

Excerpt from the Investment Policy

Preamble

The Policy governs the investments (the "Fund") of the Lucie and André Chagnon Foundation (the "Foundation"). Its provisions reflect the instructions of the Board. All persons involved in managing the Fund, including trustees, Foundation employees and external service providers, are required to comply with those provisions. The Fund is managed in accordance with all applicable laws. In the event of conflict, the latter take precedence over the Policy.

Fund objectives

Since the effects of social change can take generations to become apparent, the Foundation is intent on ensuring the continuity of its social action. To make certain that preventive and concerted action remains a central priority of Quebec society, the Foundation's goal is to generate sufficient investment income to maintain sustainability.

Management structure

The Fund must be managed through healthy portfolio diversification, whether by applying different management strategies or using several investment managers. With the exception of a few activities, management of the Fund is entrusted to external managers.

Governance and responsibility

The Governance section of the Policy describes the responsibilities of the various Fund stakeholders, including the Board, the Investment Committee, the Investment Department, and external managers.

Although the Board delegates overall management of the Fund to the Investment Committee, it retains certain responsibilities, including appointing the members of the Investment Committee and the Vice-President - Investments (ensuring that the Audit Committee Chair also sits on the Investment Committee) establishing Policy guidelines and approving the Policy.

The main responsibilities of the Investment Committee are to supervise all of the Fund's activities in accordance with the rules set out in the Policy, to regularly report on Fund management to the Board, to periodically review the Policy and recommend its adoption to the Board, and, finally, based on recommendations from the Investment Department, to approve the choice of the main service providers, including external managers.

The Investment Committee has delegated management of the Fund and implementation of the Policy to the Investment Department, which is also responsible ensuring the Policy is well executed. The Investment Department operates within a rigorous and transparent framework to provide support, transmit all pertinent information, report on its activities and make recommendations to the Investment Committee.

Risk

The primary long-term risk is the potential inability to generate the income needed to achieve the Fund's objectives. To manage this risk, an asset allocation policy has been set up to limit probability. The asset allocation policy is the element that should have greatest impact on Fund return and volatility.

Since it is currently not possible to create a risk-free portfolio that would help to achieve the objective of sustainability, a certain degree of additional risk is unavoidable. Investments in public shares and certain categories of alternative investments should generate sufficiently high returns over the long term, but will result in greater short-term variability.

Benchmark portfolio

The benchmark portfolio is as follows:

Asset class

Target allocation

Money market and Canadian bonds

16%

Other bonds

  6%

Fixed income

22%

Developed market equities

35%

Emerging market equities

  9%

Private investments

10%

Real assets

12%

Variable income

66%

Other specialized investments

12%

Conflicts of interest

Members of the Board, the Investment Committee, Investment Department and any other person with discretionary power in managing the Fund must take the necessary measures to avoid being in a situation of real or apparent conflict of interest between their interests and those of the Fund.

Review

Once a year, the Policy is reviewed by the Investment Committee, taking into account any major changes in the following areas:

  • Fund objectives
  • its expenditure policy
  • the Foundation's risk tolerance
  • long-term market perspectives

The Policy undergoes an in-depth review at least every five years.

Whenever the Policy is reviewed (annually, every five years, or otherwise), the Investment Committee recommends to the Board a draft Policy for its approval.

Financial statements (in French):

We believe

"We believe" is a short video that uses images to illustrate our constantly renewed desire to prevent poverty for the good of future generations in Quebec.

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