Porter County Administration Building, 155 Indiana Ave., Valparaiso.– Original Credit: Porter County
The Porter County Foundation Board, made up of the Porter County Council and Porter County Board of Commissioners, had good news Tuesday afternoon from its investment manager Capital Cities. The account balance from the proceeds of the old Porter Hospital was up 14.27% in 2023.
“In a year that everyone was expecting recessions across the board, really strong performance,” said Corey Waddell, senior consultant with Capital Cities, which is based in Indianapolis. He said at the beginning of 2022, 70% of economists were predicting a coming recession. But the fourth quarter performance for the foundation portfolio was up 8.87% for a year-end balance of $181,159,147.
Looking forward through 2024 Waddell said, “Inflation is obviously going to be a big story,” as well as geopolitical unrest across the globe and the U.S. presidential election. He said splitting assets into 50% equity and 45% fixed income, with the other 5% in other investments, will continue.
All fixed-income managers outpaced their benchmarks for the county, while the manager of the Wasatch Ultra Growth Institutional fund remains on a watchlist. The manager was put on the watchlist last quarter and Capital Cities typically recommends an underperforming fund remain on the list for four to six quarters.
“We make a point to emphasize and talk about that performance,” Waddell said of the focus the fund will be given in subsequent quarterly meetings with the foundation board. “It’s the second or third time it’s happened in eight years here,” he said, explaining that probationary status is based on benchmark performance and peer group comparison.
Capital Cities meets with the foundation board quarterly and focuses its first quarter meeting on the portfolio performance of the preceding year, as well as what is expected in the market environment in the new year. The second quarter meeting concentrates on portfolio construction, the third on the investment policy statement, and the fourth on fee analysis.
Porter County pays Capital Cities $16,250 per quarter for its management.
In other business, Porter County Commissioner Laura Blaney, D-South, was reelected president of the foundation, and Porter County Councilman Andy Bozak, R-At-Large, was reelected vice president. The board also transferred $5,630,598 from the Foundation Holding Fund to the Foundation Budget Fund.
“This represents the full smoothing number for 2024,” said Porter County Attorney Scott McClure. Law allows the foundation to use up to 5% of its principal balance annually, but the board has adopted a target of 3.35%. Blaney explained that if the board opted to use the full 5% annually, “our principal would shrink over time.”
By using only the 3.25%, future generations will “have about the same spending power as we have now,” she said.
Shelley Jones is a freelance reporter for the Post-Tribune.
