Investment Policy and Guidelines

Long-term Pooled Portfolio Policy
As Approved by the Board of Directors on March 9, 2012

Investment Allocation Range
Objective/Strategies
Allocation Range as
Percentage of Market Value

Growth (1) 

40% - 85%

High yield fixed income   0% - 10%
Global equities 0% - 70%
Private capital  0% - 20%
Global macro strategies  0% - 10%
Event driven strategies (ex diversified) 0% - 10%
Real estate (public & private) 0% - 10%
Other opportunistic             0% - 10%
   

Inflation hedge (2)   

5% - 25%
TIPS                                                          0% - 10%
Natural resources/commodities 0% - 15%
Other inflation hedging strategies 0% - 10%
   

Risk minimizing (3)

5% - 40%
Investment grade fixed income 0% - 20%
Relative value/Event driven (diversified) 0% - 15%
Cash equivalents 0% - 10%
Other low volatility strategies 0% - 10%


Additional parameters

Maximum portfolio volatility 12%
(annualized standard deviation for rolling 12 quarter returns)

Liquidity minimum equal to net outflows + 1% of portfolio market value
(outflows include spending allocations, administrative fees, manager and consulting fees, and capital calls)

Manager allocation maximum:

  • Publicly traded and liquid assets  20%
  • Other 5%

 

(1)    Growth is defined as volatility >5%
(2)    Inflation hedging is defined as having correlation to unexpected inflation >= 0.5
(3)    Risk minimizing is defined as volatility <=5%



Non-endowed Asset Investment Policy
As Approved By The Board Of Directors
March 9, 2012

Non-endowed assets will be invested in accordance to the following parameters:

  • Invest $2 million in short-term instruments to cover overall liquidity needs, adjusting balances as needed to cover seasonal draws and significant events; plus
  • Invest the remainder of assets to achieve yield targets with investment grade bond-like risk (i.e. credit and volatility): 
  1. U.S. treasury securities and corporate/agency bonds such that the portfolio averages a rating of at least A/A2 or better, managed with a hold to maturity intent;
  2. Investment grade bond funds or customized fixed income portfolio actively managed (subject to bond market appreciation/depreciation);
  3. Other low risk strategies with higher yields and volatility similar to investment grade bonds (e.g. short duration high yield, fixed income substitutes)
  • The portfolio will be invested to provide at least $3 million in yield and maturities annually, and be sufficiently liquid to meet unusually high draws on these funds.
  • Subject to the above parameters related to risk and reasonably expected return, and approval by the Finance and Investment Committees, up to 10% of assets may be invested opportunistically to support University or Foundation objectives.
  • All earnings from the investment of non-endowed assets will be retained by the Foundation and used to support its operations.
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