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Capital Cities reports negative Q4 for foundation; board approves three‑year consulting amendment and related invoices
Summary
Capital Cities reported the foundation fell 2.3% in Q4 but gained 9.8% over 12 months. The board approved a three‑year amendment to the investment consulting agreement and approved advisor and audit invoices totaling $21,250.
Capital Cities, the foundation's fiduciary advisor, told the Porter County Government Charitable Non For Profit Foundation, Inc., that the portfolio had a negative return of 2.3 percent in the fourth quarter but a strong 12‑month return of 9.8 percent.
Amanda Black, Capital Cities' chief investment officer, said the foundation's market value at quarter end was about $192.8 million and that underperformance versus the benchmark for the quarter came mainly from active managers, which had exposure to interest‑rate sensitive assets and other styles that lagged large‑cap growth. Black noted the year's gains were concentrated in a handful of stocks commonly referred to as the "Magnificent Seven," which disproportionately drove passive benchmark returns.
Board members asked about alternatives, crypto exposure and whether the firm reacts directly to market moves. Black said underlying managers choose individual securities and Capital Cities oversees manager selection and portfolio allocation. She described the firm's upcoming fiduciary calendar: an asset allocation study at the next quarterly meeting, followed by an investment policy statement review and an annual fee study.
On formal actions, the board approved a three‑year amendment to the investment consulting agreement (dated Jan. 1, 2016). Board members asked whether the term could be year‑to‑year; Capital Cities replied that a longer term locks prices and provides stability, while the contract allows termination for cause. The amendment motion carried by roll call.
The board also approved Capital Cities' fourth‑quarter invoice for $16,250 and authorized payment of Katz, Sapper and Miller's audit invoice of $5,000. The board accepted the auditors' financial statement letter for the 2023 and 2022 audits.
Ending: Capital Cities and staff will return with the asset allocation study and policy review at the next quarterly meeting, and the board approved payment of the advisor and auditor invoices to close year‑end business.
