Investing for the Next Generation

Makena believes that identifying and advancing material factors related to environmental stewardship, social impact, and corporate governance can improve shareholder returns. Our sustainable investment framework starts with and is rooted in our fiduciary responsibility to deliver the highest risk-adjusted, long-term returns for our investors.

This letter reflects on this new regime and addresses how we are responding to these heightened risks and “changed facts,” while still adhering to our core principle of being a long-term investor. The bottom line: we still have no edge in predicting these macro and geopolitical events, but we’re concerned that the dispersion of market outcomes has increased and that the compensation for risk is lower than it was a couple of years ago. Therefore, we have dialed back our risk levels and are being more cautious about rebalancing, unlike our approach to managing the portfolio in the spring of 2020. We still like the balance in our portfolio, which will help us navigate both inflationary and low-growth disinflationary environments.