ST. THOMAS MORE COLLEGE’S INVESTMENT FUND
CASE STUDY SOLUTION
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SYNOPSIS
Derrin Raffey, chief financial officer (CFO) at St. Thomas More College (STM) in Saskatoon,
Sa
Saskatchewan, oversaw the management of STM’s investment fund. With a value of more than CA$22
million,2 managing the fund required careful consideration of various factors, including performance, the
appropriateness of the holdings, management fees, and relationships with investment managers. In recent
times, the fund had held investments that were not appropriate for the college due to their incompatibility
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with STM’s religious values. With the hiring of a new investment manager in 2019 and the switch from a
pooled investment fund to a discretionary investment strategy, Raffey and the board of governors thought
tio
the college was in a better position to ensure that its investments were compatible with the organization’s
values. In 2022, it was determined that a more formalized investment manager review process needed to be
established, along with a review template. The investment committee set a deadline of one year to develop
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this template. Was it possible for STM to balance its requirements for growth and financial returns with its
stakeholders’ interests? How could the college measure the success of the investment fund?
So
OBJECTIVES
• Compare and contrast pooled fund investment with discretionary investment, taking into consideration
the elimination of unsuitable holdings from a client’s portfolio;
• Develop criteria to include in an investment manager review template and understand the importance
of this tool for an investment management group; and
• Determine how an investment committee could apply the Chartered Financial Analyst Institute’s (CFAI)
guidance to the duties of an investment manager, taking stakeholder needs and constraints into consideration.
The Case Solution Starts From page 4
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Analysis – Questions
1. Discuss the pros and cons of a pooled investment product, as well as the pros and cons of discretionary
investment. Should Raffey revisit the decision to switch and pivot the fund back toward a pooled product?
2. Historically, STM has reviewed the college’s investment managers on an ad hoc basis. Develop an
investment manager review template to address the following issues regarding the investment
management firm:
• Manager ethics
• Communication
The Case Solution Starts From page 4
, • Philosophy
• Portfolio
• Performance
3. Analyze STM’s investment strategy as it relates to its stakeholders’ requirements. Determine how the
investment committee could apply CFAI guidance to the duties of an investment manager.
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tio
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So
ANALYSIS
1. Discuss the pros and cons of a pooled investment product, as well as the pros and cons of
discretionary investment. Should Raffey revisit the decision to switch and pivot the fund back
toward a pooled product?
Pooled Investment
Two important arguments in favour of using a pooled investment product in the STM fund include ease of
diversification and simplification of portfolio oversight. Although pooling investments together in a fund does
not automatically provide a client with appropriate diversification, in the case of the products that STM had been
offered, the level of diversification was appropriate. Regarding the simplification of portfolio oversight, it is
The Case Solution Starts From page 4
CASE STUDY SOLUTION
e
pl
m
SYNOPSIS
Derrin Raffey, chief financial officer (CFO) at St. Thomas More College (STM) in Saskatoon,
Sa
Saskatchewan, oversaw the management of STM’s investment fund. With a value of more than CA$22
million,2 managing the fund required careful consideration of various factors, including performance, the
appropriateness of the holdings, management fees, and relationships with investment managers. In recent
times, the fund had held investments that were not appropriate for the college due to their incompatibility
n
with STM’s religious values. With the hiring of a new investment manager in 2019 and the switch from a
pooled investment fund to a discretionary investment strategy, Raffey and the board of governors thought
tio
the college was in a better position to ensure that its investments were compatible with the organization’s
values. In 2022, it was determined that a more formalized investment manager review process needed to be
established, along with a review template. The investment committee set a deadline of one year to develop
lu
this template. Was it possible for STM to balance its requirements for growth and financial returns with its
stakeholders’ interests? How could the college measure the success of the investment fund?
So
OBJECTIVES
• Compare and contrast pooled fund investment with discretionary investment, taking into consideration
the elimination of unsuitable holdings from a client’s portfolio;
• Develop criteria to include in an investment manager review template and understand the importance
of this tool for an investment management group; and
• Determine how an investment committee could apply the Chartered Financial Analyst Institute’s (CFAI)
guidance to the duties of an investment manager, taking stakeholder needs and constraints into consideration.
The Case Solution Starts From page 4
, e
pl
m
Sa
n
tio
lu
So
Analysis – Questions
1. Discuss the pros and cons of a pooled investment product, as well as the pros and cons of discretionary
investment. Should Raffey revisit the decision to switch and pivot the fund back toward a pooled product?
2. Historically, STM has reviewed the college’s investment managers on an ad hoc basis. Develop an
investment manager review template to address the following issues regarding the investment
management firm:
• Manager ethics
• Communication
The Case Solution Starts From page 4
, • Philosophy
• Portfolio
• Performance
3. Analyze STM’s investment strategy as it relates to its stakeholders’ requirements. Determine how the
investment committee could apply CFAI guidance to the duties of an investment manager.
e
pl
m
Sa
n
tio
lu
So
ANALYSIS
1. Discuss the pros and cons of a pooled investment product, as well as the pros and cons of
discretionary investment. Should Raffey revisit the decision to switch and pivot the fund back
toward a pooled product?
Pooled Investment
Two important arguments in favour of using a pooled investment product in the STM fund include ease of
diversification and simplification of portfolio oversight. Although pooling investments together in a fund does
not automatically provide a client with appropriate diversification, in the case of the products that STM had been
offered, the level of diversification was appropriate. Regarding the simplification of portfolio oversight, it is
The Case Solution Starts From page 4
