FINANCIAL STRATEGIES INVESTING IN OUR VALUES

FINANCIAL STRATEGIES

Investing in Our Values

Like many other schools, Castilleja has embarked on making significant changes in response to the vast reach of institutionalized and systemic racism. In 2020, realizing we needed to deepen our commitment to become a more just and equitable school, we launched a framework for Teaching and Learning Antiracism and defined five Antiracism Competencies.

At Castilleja, we always think deeply and critically to find answers. So we asked ourselves: how are we conducting the business of the school? What can we do differently to promote justice and equity beyond the classroom and authentically live our values?

When describing the thought process behind shifting the school’s business practices, Kathy Layendecker, Associate Head of School for Finance and Operations, stated, “To restore justice and create equity is to create more economic opportunities for those who identify as people of color.” The first step? Evaluate the school’s endowment and research how other institutions were investing money to champion justice and inclusivity.

Ms. Layendecker and Alyssa Rieder P’20 ’23, Chair of the Board’s Investment Committee, then convened a working group of Investment Committee members. In partnership with advisors from Cambridge Associates, the group spent a year studying various approaches to diversity, equity, inclusion, and justice (DEIJ) investing including how to define a diverse investment so that the investment strategy would support the school’s equity goals. Ultimately, the Board decided to invest in funds owned and/or managed by women and people of color.

Not only does this decision align with the school’s commitment to DEIJ, but also, the data indicates that diversifying the backgrounds of managers and owners of funds results in higher than average returns. This is consistent with other data about the benefits of including diverse groups in decision-making. Creating lasting change takes time and patience. Investing in an endowment is no different—shifting strategies is a long-term pursuit. However, it is also satisfying to begin witnessing signs of progress. Within the first year of adopting a new investment strategy, we have already seen a commitment to diverse managers and ownership increase as a percentage of the overall endowment investments.

CASTILLEJA’S INVESTMENT PROGRAM'S DEFINITION OF DIVERSE FIRMS

• Firms are considered women-owned or people of color-owned if at least 33% of firm ownership is held by women or people of color.

• Strategies are considered women-led or people of color-led if at least 33% of senior portfolio manager positions on the team are held by a woman or a person of color.

• Strategies that specifically seek to invest in organizations and securities that address the needs of diverse groups are also considered diverse.

“I am excited that Castilleja demonstrated such strong commitment and leadership in addressing these issues so thoughtfully. The Board Investment Committee spent significant time and effort to become more educated on these issues, engaged in deep internal discussions, and then collaboratively formulated deliberate and nuanced investment management guidelines, simultaneously codifying appropriate tracking of, and reporting out on, relevant metrics.” —Alyssa Rieder P’20 ’23, Chair of the Board’s Investment Committee