The Lynde and Harry Bradley Foundation, Inc.

Recommendations/Actions

Wilshire Associates Incorporated

Asset Allocation Analysis

Wilshire

Asset Allocation Analysis Bradley Foundation

April, 1996 Actions Recommendations April, 1996 through January, 1997
Asset Allocation
1. Increase equity allocation. This is a long 1. Equity Allocation:

term strategic move. Given currently high % Amount

market valuation, implement increase (1) after 1/31/97 71.6% $371,149

correction, and (2) over time. 4/30/96 68.7% $333,504

Increase due principally to spending from the

fixed income portfolio and positive 1997

equity returns.

2. Increase international allocation. 2. International Allocation:

% Amount

1/31/97 18.47% $95,793

4/30/96 17.59% $85,430

3. Consider higher return, less efficient 3. Alternative Investments:

private market investments. 1/31/97 4/30/96

Total Commitments $33,000* $18,000

Amount Invested $19,392 $17,335

Fund Balances $20,657 $17,930

% of portfolio 3.98% 3.69%

* Includes GS Private Equity Partners

4. Implement asset allocation management 4. Formal annual review plus ongoing policy to guide rebalancing process and monitoring. Discretionary rebalancing maintain target allocation. as needed.

Investment Structure

1. Index the large capitalization domestic 1. Investment of $30 million in BZW Barclays

equity portfolio, reallocating time and Equity Index in April, 1996. Reduced to

resources to higher probability opportunities. $12.4M at 1/31/97 due principally to the

This is an efficient area of the market, and your retention of TCW Large Cap Fund and

returns have, like most others, underperformed $30M investment in Acacia Institutional

the market on a net of fee basis. Partners.

2. Adjust equity manager allocations to obtain 2. Equity style has remained relatively constant.

style neutrality. Bias to high midcap range with growth

characteristics. Current mapping does not

include Acacia Institutional Partners stocks,

which have a value bias.

3. Convert Global equity mandate to 3. Reviewed alternatives. Two principal

international mandate. considerations are fees and control of asset

allocation. In both instances, there was no

persuasive reason to change the global

arrangement to separate domestic and

foreign stock portfolios.

4. Implement performance fees for active investment 4. Adopted performance fee arrangement for

managers to align expenses with returns. Acacia Institutional Partners. In the short

term, the performance fees are higher than a

regular fee arrangement without any

incremental performance benefit.