Investments

CBT has an Investment Program which prudently invests the $321 million endowment in order to deliver long-term benefits to the residents of the Columbia Basin. This Investment Program currently invests in power projects, private placements and market securities. The objective of the Program is to generate a predictable, sustainable and appreciating income stream to fund CBT's current and future Delivery of Benefits activities and corporate operating expenses.

Predictable investment returns allow CBT to confidently forecast the amount of funds that will be available for Delivery of Benefits programs and initiatives. Sustainable investment returns do not vary widely from year-to-year. Therefore, the funding available for Delivery of Benefits programs and initiatives will be relatively stable. Appreciating investment returns are required to offset the effects of inflation, as well as grow the Delivery of Benefits programs and ensure future generations receive the same or greater benefit as do current residents.


How is the Investment Portfolio managed?

In the spring of 2006 CBT set out to define an enterprise wide investment policy that would govern the management of the Provincial endowment. After an extensive development process that included consultation with financial industry professionals, regional stakeholders, and Basin residents at large, CBT's Board adopted a new Statement of Investment Policies and Procedures (SIPP) in July 2007.

Embedded in the SIPP are seven foundational investment beliefs:

  • CBT believes that future generations should benefit from the same level of support as current residents. To preserve this legacy, investment policies and grant/spending policies should result in the retention of sufficient funds to offset the effects of inflation in the long term.
  • CBT's priority is investment opportunities in the Columbia Basin. However, given the limitations of investing in a relatively small region, it is expected that a portion of the assets will be maintained in market securities.
  • CBT believes that the best performing and most profitable investments are those that maintain high ethical and environmental standards, and commits to the principles of strong corporate governance.
  • CBT believes in the principles of a prudent investor and requires investment returns that are commensurate with the level of risk assumed.
  • CBT recognizes that managing investment risks is just as important as generating returns.
  • CBT recognizes the benefits of asset diversification and adopts the objective in principle. However, CBT further recognizes the benefit may be constrained by the large investments in power projects.
  • CBT values financial partnerships and when possible, will undertake investments in cooperation with other organizations.

Columbia Basin Trust