Money Managers

Waco Foundation’s portfolio is amply diversified across various asset classes and styles in an effort to meet the Foundation’s objectives. The investment results of each manager are regularly monitored by the Foundation’s Investment Committee and our investment consultant, Colonial Consulting, LLC. Areas of investment, along with the applicable company that manages that aspect of the Foundation’s portfolio, include:

Equities (52%)

Equity investments usually consist of the purchase of stock from a publicly-traded corporation. Companies pay their investors dividends to reward their investments and the value of the stock increases with expectations of later dividends. Equity investments are usually high interest yielding but carry a larger amount of risk than more steady investments.

Large/Mid-Cap Equity

Large-cap equity consists of equity invested in companies with stated assets greater than $10 billion. Mid-cap equity consists of equity invested in companies with stated assets greater than $2 billion but less than $10 billion. Large-cap equities are more stable investments than other types of equity, due to the stability and permanence of large companies. Because of this, large-cap equities have less risk than other equity investments but also tend to have a lower annual return. Mid-cap equities are more risky than large-cap equities, but less risky than small-cap equities.

DFA US Core Equity, Austin, TX

The investment seeks long-term capital appreciation.  The fund purchases a broad and diverse group of securities of U.S. companies with a greater emphasis on small capitalization and value companies as compared to their representation in the U.S. Universe.

Vanguard Index Fund, Wayne, PA

An index fund that is designed to mimic the S&P 500, a gauge of overall U.S. stock returns. Benchmark: S&P 500.

Eagle Capital Management, New York, NY

Eagle Capital's investment objective is to seek capital appreciation, net of fees, while taking less risk than the market by investing primarily in U.S. equities with a "value" approach, and to a lesser extent in work-outs, high yield securities and other special situations.

Small-Cap Equity

Small Cap equity consists of equity invested in companies with stated assets less than $2 billion. Because of the greater risk associated with investments in smaller businesses, companies reward their investors with higher annual returns, on average, than large more stable companies.

DFA US Value, Austin, TX

The investment seeks to achieve long-term capital appreciation. The fund normally will invest at least 80% of its net assets in securities of small cap U.S. companies.  It may use derivatives such as futures contracts and options on futures contracts for U.S. equity securities and indices, to adjust market exposure based on actual or expected cash inflows to or outflows from the Portfolio. 

Vanguard S&P 600 Index Fund

Invests in stocks in the S&P Small-Cap 600 Index, representing 600 smaller U.S. companies. Focuses on closely tracking the index’s return, which is considered a gauge of overall U.S. small-cap stock returns. Offers high potential for investment growth; share value rises and falls more sharply than that of funds holding bonds. More appropriate for long-term goals where your money’s growth is essential.

International Equity

International equity is equity invested in any company chartered outside of the United States. It can refer to either established international markets, which exhibit slower growth but lower risk (for example European markets), or emerging international markets, which exhibit faster growth but greater risk (such as China and Russia). Investments in international equity decrease a portfolio’s overall risk by decreasing exposure to purely national crises.

Marathon-London International Investment Trust I

International Equity strategy with a focus on quality companies with strong balance sheets and improving growth attributes.  The strategy will invest primarily in Non-US equities in developed countries but can invest as much as 10% in emerging countries.

Artisan International Value, Milwaukee, WI

Portfolio invests in non-U.S. equities in both developed and emerging countries. Emerging market consists of typically 10-20% of the portfolio. The team came out of Harris Associates and carries many of the same value-based investment themes in this portfolio. Benchmark: MSCI EAFE Value.

Vanguard Developed Markets

This investment seeks to provide investors with low-cost, diversified exposure to large, mid and small capitalization companies in developed markets outside of the United States.

Emerging Markets

Emerging markets equity are listed equity securities traded on emerging non-U.S. markets. Emerging markets are defined as any market that is not included in Morgan Stanley’s EAFE index plus Canada.

Highclere International SMID

Highclere will invest in small to mid-capitalization companies within the emerging market equity space.  The team at Highclere will apply a fundamental bias to stock selection, holding 40-60 names at any given time.

Aberdeen Emerging Markets, Philadelphia, PA

The Fund invests primarily in developing countries located in regions such as Asia, Latin America, Eastern Europe, the Middle East, and Africa. The portfolio seeks long-term capital growth by investing primarily in equity securities of companies located in these regions. Benchmark: MSCI Emerging Markets. 

Bonds (18%)

Bond investments are investments in debt owed by corporations or governments. Corporations or government will sell bonds to investors. These bonds make interest payments (usually annually or semi-annually) and at maturity will make a large payment at the face-value of the bond. Bonds make a great addition to portfolios because they offer steady returns.

Domestic Bonds

Domestic Bonds are bonds sold by U.S. based companies and governments. These bonds are low-risk, and provide a steady stream in interest to any portfolio.

Vanguard Total Bond Market

This fund is designed to provide broad exposure to U.S. investment grade bonds. 

Global Bonds

Global bonds are bonds issued from companies and governments outside of the U.S. These bonds are riskier than domestic bonds, but usually provide higher interest rates.

Colchester Global Bonds, New York, NY

Colchester invests in non-U.S. government bonds as well as U.S. based fixed securities (most often TIPS). The portfolio will also hedge various currencies in order to capture desired exposure. Note: the fund only buys sovereign debt; therefore no credits, etc. Benchmark: Citigroup World Government Bond. 

High-Yield Bonds

High yield bonds are bonds issued by companies considered to be a risky investment. As a result, these bonds pay very high annual interest rates.

Oaktree High-Yield Fund, LP, Los Angeles, CA

The high yield strategy at Oaktree is led by a quality team of analysts focused on identifying credits that are at low risk of default, generate positive cash flow and provide attractive yields for the risks taken.  The portfolio will be fully allocated to below investment-grade corporate debt.  

Alternative Investments (22%)

Alternative investments cover a broad array of investment strategies and include commodities such as oil, real estate and hedge funds. Alternative investments help to even out a portfolio by reducing its exposure to inflation.

Hedge Funds

Hedge funds are low-risk funds which achieve very low volatility by “hedging” their bets. Hedge funds create a minimal-risk investment by choosing an investment with particular strengths and weaknesses and then investing in an investment with opposite strengths and weaknesses - in this way, the investments off-set part of each other's risk.

Canyon Value Realization, Los Angeles, CA

Hedge fund combining "value-oriented" and "event-driven" investing, employing a "bottom up" approach and focusing on rigorous research of business, credit and legal issues in order to identify value.

Wellington Pagosa, Boston, MA 

Hedge fund - Pagosa is a multi-strategy fund-of-hedge funds that seeks attractive risk-adjusted returns through diversified exposure to hedge funds offered by Wellington Hedge Management. The fund is structured with an emphasis on strategies with low or variable beta exposure to traditional asset classes.

Bay Resources Offshore

Hedge fund containing multiple underlying long/short strategies.

Permian Capital

Hedge Fund containing multiple underlying long/short strategies.

Luxor Capital Partners

Utilizing a fundamentally driven research effort, the portfolio follows an opportunistic approach that allows it to use multiple strategies and to invest across the capital structures of U.S. and non-U.S. companies.

Hengistbury Investment Partners, London

Hengistbury is a value-oriented, long/short equity portfolio with a focus in Europe. 

Real Assets

Real assets are investments in material assets.

Aberdeen Real Estate Partners

Through a highly selective allocation process, the fund looks to provide investors with a diversified group of real estate funds primarily located in the United States.

Aberdeen Energy & Resource Partners

Seeks to provide investors access to a strategically diversified group of energy, infrastructure and other resource funds principally located in North America.

Aether Real Assets, Denver, CO

Private Real Assets Fund of Funds – Portfolio of diversified funds that will cover Energy, Agriculture, Mining, Timber, etc.  Investments will be global but primarily in North America.

Och-Ziff Real Estate III,

Private Real Estate fund – the team at Och-Ziff will invest primarily in the US via a well-diversified basket of real estate opportunities.  These include both traditional and non-traditional opportunities in this space.

Denham Commodity Partners VI, Houston, TX 

Direct private real estate fund that invests in industries, companies or assets involving Oil & Gas, Metals & Mining, and Power & Re-newables.  The fund will target global opportunities across all stages of the company or asset life cycle and all segments of the capital structure. Benchmark: Europacific Growth Fund. 

Crow Holdings Realty Partners, Dallas, TX

Long-term real estate investment with a solid team, focusing on opportunistic and value-add strategies. 

Select Strategies (8%)

Select Strategies includes multiple types of asset classes designed to capitalize on current market opportunities.

The Children's Investment Fund (TCI), New York, NY
TCI is a concentrated long-biased fund with 10-15 global equity positions.  Led by Chris Hohn, this strategy is intended to deliver out-sized returns for the portfolio over a long period of time. 

Cat Rock, Greenwich, CT
Cat Rock Capital is a long-biased global long/short strategy.  The portfolio includes ten to fifteen material positions with holding periods of three to five years, with a ten-year outlook for each position.  The long portfolio is managed in a highly concentrated manor with a focus on mid-cap and large-cap companies.  the short portfolio is utilized opportunistically to generate alpha, not to manage net exposures.  The vast majority of returns are expected to be generated by the Fund's long portfolio.

Effissimo Capital, Singapore
Effissimo is an independently owned, concentrated value investor that solely invests in companies domiciled in Japan.  Effissimo's portfolios have ranged from 15 to more than 200 companies, however the majority of the portfolio's net asset value will usually be concentrated in the top 20 positions.

BLS Global, Denmark
BLS Global is a global equity portfolio with a long-term focus, allowing this team from Denmark to avoid short-term noise and determine long-term instrinsic value in each position it holds. 

Asset Allocation (Target) as of 03.31.2018


Phone: 254-754-3404
Fax: 254-753-2887


1227 N. Valley Mills Drive
Suite 235
Waco, TX 76710

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