Partners Healthcare Case Solution
Problem Identification
It is expected that many different investment pools have been established by the management of the company, which includes both short term and long term investment pools. The management of the hospital invests the funds in order to generate desired expected return by minimizing the overall risk of the portfolio. It is expected that short term investment pools are considered as a risk free investment among the overall portfolio as it generates high quality fixed return.
However, the long term investment pool generates greater return as compared to the short term investment pool but it also carries highest risk therefore, the investment committee of the Partners Healthcare is trying to identify an optimal portfolio mix which could provide greater return by minimizing the risk.
Analysis
The structure of the Partners Healthcare system comprises of all the physicians who could invest in the investment pool of the Partners Healthcare.The detailed structure of the organization is as follows:
On the other hand, long term investment pools are considered as risky pools, which mostly comprise of various type of equities.
It is expected that the risk profile of each hospital is different, therefore the Partners Healthcare managed its investment pools according to the desired returns and expected risk tolerance level of each hospital. The maturity period and expected return from the short term investment pool is low and it provides low risk free return to its holders.
It is expected that long term investment pools are considered as risky assets with greater return and greater maturity period as compared to the short term investment pools. Moreover, the risk appetite of each hospital is different, therefore each hospital investment is as per its risk appetite in order to generate greater return by minimizing overall risk of the portfolio.
It is expected that each hospital of the Partners Healthcare provides various healthcare services across England, therefore investment returns are more critical for each hospital as it provides funds in order to satisfy the need of each hospital in a timely manner.Thus, the financial strategy with respect to managing investment pools is more important as each hospital is considered as a non for profit organization and it involves greater number of stakeholder and beneficiaries. Moreover, investing in financial instruments is also considered as more risky as they get affected majorly in case of financial crisis and in economic downturn hence, the investment committee of the Partners Healthcare should formulate financial strategies with respect to the investment pools as return from these investment pools satisfy the need of community at greater level.
Motives behind the addition of Real Assetsto LTP
It is expected that the investment committee of the Partners Healthcare introduced real assets in the long term investment pools of the organization...................
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