Asset owners--the cornerstones of the investment ecosystem--often have very long-term investment goals, such as funding liabilities, building an endowment for perpetuity or providing for subsequent generations. For some of these asset owners, especially pension and retirement funds, these goals reflect the long-term needs of individual plan members who rely on these institutions to safeguard and build the savings which they will rely on down the road.

Download Report

Ensuring assets are managed in line with these long-term horizons is critical to achieving these goals. This presents a challenge, however, because assets are often managed by asset managers, distinct from the asset owners, and they may have different time horizons, incentives, and goals.

Among the most important elements in ensuring that institutional investor partnerships fulfill long-term objectives are the investment management contracts between asset owners and asset managers, the “mandates.” The terms and conditions embodied in these mandates constitute a mutual mechanism to align the asset managers’ behaviors with the asset owners’ objectives. These contracts define the relationships between asset owners and asset managers and play a crucial role in ensuring the success of these relationships over time.

Shaping these mandates with provisions specifically oriented towards long-term goals can help build stable, lasting investment partnerships and, if designed properly, improve long-term performance. Hear from some of our Members on the importance of a long-term oriented mandate:

Video

Mark Machin (CPPIB) on Long-term Mandates

28 February 2018 - CPPIB's Mark Machin discusses the importance of long-term investment mandates. From the 2018 Focusing Capital on the Long Term Summit in New York.

Learn More

Incentive Alignment | Article

Long-term Mandate Provisions from Kempen Capital Management

7 January 2020 - Kempen has implemented key mandate provisions as laid out in "Institutional Investment Mandates: Anchors for Long-term Performance".

Learn More

Incentive Alignment | Video

Investment Mandates 101

29 May 2019 - ...

Learn More

Incentive Alignment | Article

Long-term Mandate Provisions from Ontario Teachers’ Pension Plan

30 January 2020 - Ontario Teachers’ scales several long-term mandate provisions across the fund and pilots many others.

Learn More

Incentive Alignment | Article

MFS overhauls investment reporting

24 January 2020 - MFS takes action on the order of data, references to benchmarks, and inclusion of turnover.

Learn More

Article

Establishing a long-term time frame with performance reporting

23 March 2020 - Global investors take action by reporting on long-term returns.

Learn More

Video

The Importance of Long-term Investing: OTPP

28 February 2018 - Nicole Musicco from Ontario Teacher's Pension Plan on the importance of investing for the long term. From the 2018 Focusing Capital on the Long Term Summit in New York.

Learn More