Investment Policy Statement

An investment policy statement (IPS) is the written agreement between a family (through its investment committee) and the investment team about what the portfolio is for. It defines return objectives, risk tolerance, asset-allocation ranges, liquidity needs, ESG and exclusion preferences, concentration limits, and the protocols for escalating decisions outside those parameters.

Working IPSs are reviewed annually and revised when the family's circumstances change materially: a major liquidity event, a generational transition, or a meaningful change in risk capacity. Between reviews, the IPS is the standing reference.

The discipline an IPS enforces is one of the strongest predictors of whether a family office's investment activity remains aligned with the family's actual objectives over decades.