Just what do we mean by Funds? Well many things, such as Venture Capital Funds, Hedge Funds (many different kinds), Real Estate Funds, Leveraged Buyout Funds, Fund of Funds etc. etc. etc.
The many Shell Pension Plans started investing in Funds back in the 1970's. At that time they were called non traditional investments and later private investments. Since that time, with a few recent bumps, Funds have been the fastest growing segment of Institutional Tax Exempt Investors such as Pension Plans, Foundations and Endowment Funds. Why is that?
For one answer, see my note dated September, 1991 below. Also, I think the reader will find reading the later notes to also be equally informative.
Comments by Len Chaikind - July 15, 2006
From what I can gather from reading the literature on Private Investments (also called non-traditional investments), many consultants would consider that the average return would be about 12%. While this is quite a bit better than the average traditional investment, i.e. a combination of equity and fixed income managers which long term tends to be about 6% real and maybe 8% nominal (including inflation), it still is low relative to what we can see as a very doable return.
In my view, based on maybe 30 years of experience in this area, this number should be more like 20 to 30 percent per annum on an IRR basis. Further, if the investor would be properly selective and diversified, bringing this part of the portfolio up to a range of 20 to 40%, this should also have a long term impact of reducing the risk (volitility) of the entire portfolio.
Comments by Len Chaikind - April 15, 2006
IICC's long term goal is to work with some very high quality Funds (see above for a definition) and to raise over $5 billion dollars within 10 years. Actually we have already raised considerable monies for Funds in the past, but for various reasons have not been actively involved in this area for about 2 years. We now think the time has come to reactivate this goal.
A key person for each Fund will be the Executive Director of CEO of the Fund. It is also intended that IICC (not Tradeco) will be a part owner along with others, including myself, of each Fund.
For more information on Private Equity Funds, Hedge Funds and the Lyxor Platform, please click on the sites noted below.
This is another interesting site. SGG is not a client of IICC, but we like their web site.
At our last Conference Call session, we talked about 4 IICC Funds which we would like to start soonest:
1 - IICC Real Estate Special Opportunities Fund (Alan Cosby)
2 - IICC Nano Fund (I.J. Ikavalko)
3 - IICC Better World Venture Fund for a Better World (Gary Richardson)
4 - IICC Film and Entertainment Fund (Moonli Singha)
IICC and Leonard Chaikind will be owners of each of these funds; anyone seeking to raise money for the fund will be part of its management. Therefore, it is not intended that IICC-Tradeco be used as a fundraiser for any of these funds.
Much more information on these four funds will be shortly forcoming; also we plan to establish a separate web site for Funds in the near future. Our immediate goal is to find what we call the "seed investor" ideally some one that would committ say 10% of the fund. This concept is actually quite complicated and we would be pleased to talk about it with interested parties.
I started all of this when I was managing all of Shell's money.
We are also looking for leaders for more than 3 other funds, including the China American Friendship Fund, the IICC Energy Fund and the Carribbean American Friendshp Fund.
Comments by Len Chaikind - September, 1991
I retired from Shell and set up Institutional Investors Consulting Company or IICC with Shell (actually 4 different Shell groups, including the Shell US and the Shell English Pension Plans) as our first clients. Our goal is to focus on the private equity arena, where we think institutional investors, e.g. the Harvard Endowment Fund, can make safe investments relative to other sectors and at the same time earn over 20% per annum. My experience at Shell for many years was that we could easily outperform that number. It mostly takes perseverance and common sense in selecting money managers, two traits that are often lacking with Institutional investors.
Comments by Len Chaikind - 3/15/2015
Last Friday at our monthly Conference Call session, we talked about the BW Better World Foundation and the IICC - Better World Fund and their interconnections. We already have a web site for the Better World Foundation (BWF) www.bwbwf.org and will soon have one up and running for the IICC - Better World Fund. Our (IICC's) objective is still the same as in 2006 - to have $5 billion under management by the end of 2016. In order to get there, we will need lots of help from our various Associates.