Investment Objectives
The Foundation’s investment objective is to earn above benchmark investment returns and grow the portfolio over the long-term in order to provide significant, ongoing funds for current and future grantees. The Foundation will assume an appropriate level of risk in an attempt to not only preserve, but to grow the spending power of the endowment in real (inflation-adjusted) terms.
Endowment History and Guiding Principles for Investment
When David Packard died in 1996, he left the bulk of his estate to the Foundation in the form of Hewlett-Packard Company (HP) stock along with the guidance that—all else being equal—the Foundation should remain invested in HP stock. This was not a requirement, but was strong guidance. In 1999, when HP spun off its measurement and components businesses as Agilent Technologies, the Foundation’s investment portfolio became one that consisted primarily of HP and Agilent stock.
In 2003, the Board of Trustees authorized the diversification of the Foundation’s two-stock portfolio to dampen the risk of volatility, but over time reduced its holdings in HP and Agilent to less than seven percent of the portfolio. Visit our Asset Allocation page to learn how our endowment is currently allocated.
Concurrent with the diversification program, the Foundation examined how best to manage the endowment going forward. The Foundation created an Investment Committee in September 2006 and hired a chief investment officer (CIO). The chief investment officer works with the Investment Committee to guide the Foundation in building investment staff, structure, and priorities that align with the Foundation’s history, mission, and values.
For many years, the Foundation has been a leader in making program-related investments (PRIs). By their nature, these investments support the program goals and overall mission of the Foundation. The Packard Foundation may invest up to three percent of its endowment in PRIs at any given time; for 2009, up to $180 million can be invested in loans, guarantees and mission-related equity investments. Read more about our PRIs here.