The year marked an important milestone for The James Irvine Foundation’s investment portfolio. After almost 15 years of service and strong portfolio results, Chief Investment Officer John Jenks retired at the end of 2016.

John’s investment outcomes helped the Foundation make significant strides in its programmatic work to expand opportunity for the people of California. I joined the Foundation at the end of 2016 and am honored that the Foundation selected me as the new CIO and Treasurer. We will continue to evolve Irvine’s strong investment platform to support our financial success amid dynamic financial markets.

Irvine’s Investment Principles

What’s critical to our continued success is our relationships with investment partners. That’s why early in my tenure as CIO, the investment team articulated our shared Investment Principles. We believe it is important to share these with our investment partners so they have a better appreciation for our approach to investments and what drives our behavior. These principles are the foundation for building a successful investment portfolio:

• We are a long-term investor
• We believe that relationships matter
• We value independent thinking
• We are a conviction-based investor
• We are a flexible and nimble partner
• We are intellectually curious
• We align Irvine’s interests with the interests of our partners

Irvine’s Portfolio Results

Partnering with top investment managers will help Irvine continue to evolve its investment strategies and the opportunities those can present. Like many endowments and foundations, Irvine’s investment portfolio currently has a significant exposure to equity securities, both public and private. This includes a significant commitment to venture capital and private investments. Due to multiple years of strong performance, the Foundation’s exposure to private investments continues to track above the target percentage of the overall portfolio.

As a long-term investor, it is important to measure performance over long time periods, especially when the portfolio has a significant amount of private investments. The Foundation has been rewarded as a long-term investor, generating a 7.2-percent portfolio return over the past 10 years. Two key contributors have driven Irvine’s long-term returns: superior manager selection and an overweight to quality private investments.

On a current year basis, the portfolio delivered a slightly weaker 4.6-percent return, driven primarily by weakness in private investments. As mentioned earlier, this has been a long-term source of very strong returns for the Foundation.

Investments’ Impact on Grantmaking

As a result of strong historical investment results, Irvine’s Board of Directors approved an increase to our 2017 grantmaking budget to $91 million (from an $85 million budget in 2016). And that, at the end of the day, is why we are in business. We would like to thank all of our investment partners for their contributions in allowing us to expand our grantmaking budget and expanding opportunity for the people of California.

We will continue to evolve Irvine’s strong investment platform to support our financial access amid dynamic financial markets.