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HSUAF 11-09 HSU Advancement Foundation Investment Policy

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Month/Year Posted: 
10-2012
Policy Number: 
HSUAF 11-09

HSU Advancement Foundation

Investment Policy

Approved at October 19, 2012 Board Meeting
(Replaces and Supersedes Policy Approved September 30, 2011)
 
I. POLICY STATEMENT
 
This Investment Policy is intended to provide guidelines for the prudent investment of the Foundation asset portfolio and to outline the policies for maximizing the effectiveness and efficiency of the Humboldt State University Advancement Foundation (hereafter referred to as the Foundation) investment management program. The goal of this Investment Policy is twofold: one is to enhance the economic status of the Foundation while preserving its capital resources; the second is to provide for authorized investments.
 
II. INVESTMENT OBJECTIVE
 
The purpose of acquiring charitable funds is to support the University and its mission over the long term. Accordingly, the purpose of this policy is to establish a framework for the investment of Foundation assets, and to ensure that future growth of these assets is sufficient to offset normal inflation plus reasonable spending, thereby preserving the constant dollar value and purchasing power of the assets for future generations. This policy will establish appropriate risk and return objectives in light of the fund’s risk tolerance and investment time horizon. Asset allocation guidelines and suitable investments shall be established by the Foundation consistent with the policy.
 
The objectives of the Investment Policy shall be defined as follows: Absolute – which shall be measured in real (i.e. net of inflation) rate-of-return terms and shall have the longest time horizon for measurement; Relative – which shall be measured as time-weighted rates of return versus capital market indices; and Comparative – which shall be measured as performance of the investment manager(s) as compared to a universe of similar investment funds.
 
The Absolute Objective is to seek an average total annual net return of at least 4.5%, plus the consumer price index (CPI). With the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of like character and of like aims, the objective is to achieve the greatest return possible to optimize resources to achieve University goals. This objective shall be measured over an annualized, rolling five and ten year time period. The intent of this objective is to increase, over time, the principal value of assets as measured in real, inflation adjusted terms.
 
The Relative Objective is to seek competitive investment performance versus appropriate or relative capital market measures, such as securities indices. The objective shall be measured primarily by comparing investment results; over a moving annualized three and five year time period to a weighted strategic benchmark created by weighting appropriate indexes (i.e.: 90 day Treasury, Merrill Lynch 1-3 Year Treasury, Barclays Aggregate, S&P 500, etc.) according to the portfolio’s actual asset class weighting at the beginning of each month.
 
The Comparative performance objective is to achieve a total rate of return that is above the median performance of universe of similarly managed funds.
 
Endowment and quasi-endowment assets have a long-term, indefinite time horizon that runs concurrent with the endurance of the institution, in perpetuity. As such, these funds can assume a time horizon that extends well beyond a normal market cycle.
 
The general policy shall be to diversify investments among both equity and fixed income securities so as to provide a balance that will enhance total return while avoiding undue risk concentration in any single asset class or investment category.
 
III. SPENDING POLICY
 
The amount withdrawn in each fiscal year will be targeted at 4.5 percent of the Foundation’s average total market value during the 12 quarters ending with the last quarter of the previous fiscal year. The Foundation may also spend any additional funds that were available to spend but were not withdrawn in previous fiscal years. 
 
IV. RESPONSIBILITIES
 
The following parties associated with the Foundation shall discharge their respective responsibilities in accordance with all applicable fiduciary standards as follows: (1) in the sole interest of the Foundation’s contributions and beneficiaries; (2) with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and of like aims; and (3) by diversifying the investments so as to minimize the risk of large losses.
 
A.                Board of Directors: The members of the Board of Directors are the fiduciaries of the Foundation and are ultimately responsible for the investments of the Foundation.
 
B.                 Finance Committee: The members of the Finance Committee have been delegated authority by the Board of Directors to provide oversight to management of the day-to-day administrative issues associated with the Foundation’s assets. They have recommendatory authority to the Board of Directors with respect to the implementation of this Investment Policy and shall make detailed reports to the Board of Directors regarding the status of the Foundation’s investments.
 
                        Specific responsibilities include the following:
 
1.      Recommend investment goals and objectives for approval by the Board of Directors.
2.      Establish and, when deemed necessary, recommend modifications to the Investment Policy.
3.      Select and terminate professional investment managers as appropriate.
4.      Negotiate and/or monitoring Foundation investment expenses.
5.      Monitor and evaluate investment performance on a quarterly and ongoing basis.
6.      Assure proper custody of the investments.
7.      Report to the Board of Directors, at least annually, regarding the Foundation’s investment results, its composition and other information the Board of Directors may request.
8.      To assist in this process, the Finance Committee may retain an investment consultant.
 
 
C.                 Investment Consultant: When appropriate, an investment consultant will be charged with the responsibility of advising the Finance Committee on investment policy, spending policy, asset allocation, manager structure, investment manager selection, performance analysis and monitoring and education .
 
D.                Investment Manager(s): When appropriate, investment manager(s) is (are) delegated the responsibility of investing and managing the Foundation’s assets in accordance with this Investment Policy and all applicable law. Each investment manager must either be (1) registered under the Investment Company Act of 1940, (2) registered under the Investment Advisors Act of 1940, (3) a bank, as defined in that Act, (4) an insurance company qualified under the laws of more than one state to perform the services of managing, acquiring or disposing of the Foundation’s assets, or, (5) such other person or organization authorized by applicable law or regulation to function as an investment manager.
 
V. PRUDENCE, ETHICS AND CONFLICT OF INTEREST
 
All participants in the investment process shall act responsibly. The standard of prudence to be applied by the Committee, staff, and external service providers shall be the “prudent investor” rule, which in part, states: “A trustee shall invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution. A trustee’s investment and management decisions respecting individual assets must be evaluated not in isolation but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.”
 
All investment personnel shall refrain from personal business activity which could create a conflict with proper execution of the investment program, or which could impair the ability to execute impartial investment decisions. All investment personnel shall disclose to the Executive Director (hereafter referred to as ED) any material financial interests in financial institutions which conduct business within the jurisdiction and shall disclose any material financial investment positions which could be related in a conflicting manner to the performance of the Foundation’s investment portfolio. The ED shall report in writing to the Chairperson of the Board any issues, which could reflect any conflict in the performance of the Foundation’s investments.
 
VI. INVESTMENT MANAGEMENT - ASSET CLASS GUIDELINES
 
The Foundation may be invested in separately managed accounts, commingled funds, or mutual funds. In such cases, the manager(s) of these funds will have full discretion over the portfolio management decisions with the following guidelines and those established by respective prospectuses.
 
A. Equity Investments:
 
The overall investment objective of the equity portion is to provide top quartile long-term total returns relative to the broad equity market and to the returns of other funds with similar objectives and investment styles. The equity portion shall be invested under the following guidelines:
 
1.      Allowed investments include publicly traded common stocks, preferred stocks, stock warrants and rights, convertible bonds, securities issued by non-U. S. companies traded on U. S. exchanges, as well as REITs (real estate investment trusts) and any other investments as allowed by respective prospectuses.
 
2.      Equity securities shall be diversified in number so that no one commitment to any company shall exceed 5% of the value of the Foundation’s equity portfolio based on cost at the time of acquisition or 7% at market value of the equity portfolio.
 
3.      The Foundation shall not hold more than 5% of the equity securities, or those securities convertible into equity securities, of a single issuer.
 
B. Fixed Income Investments:
 
The overall investment objective of the fixed income portion is to provide (above average) top quartile long-term total return relative to the fixed income market and to the returns of other fixed income funds through traditional fixed income management techniques. The fixed income portion shall be invested under the following guidelines:
 
1.      Allowed investments include corporate and government bonds, asset-backed securities and any other fixed income investments as allowed by respective prospectuses.
 
2.      Average credit quality shall be A or better.
 
3.      With the exception of U. S. Government and Agency issues, no more than 10% of the bond portfolio at market will be invested in the securities of a single issuer or 5% of the individual issue.
 
4.      There shall be a maximum limitation on below-investment-grade bonds of 10% of the bond portfolio.
 
5.      There shall be a maximum limitation on non-U. S. bonds of 30% of the bond portfolio.
 
C. Short Term Investments:
 
Cash shall be continuously invested until needed in the following: U.S. Treasury Bills, quality (A1/P1 or equivalent at the time of purchase) commercial paper, savings accounts, and other money market investments as approved by the Committee.
 
D. Real Estate:
 
Commingled Real Estate Funds - The Foundation may invest in a commingled real estate fund that offers broad geographical diversification utilizing a wide range of property types. Investment in a commingled fund offers much greater liquidity by allowing the Foundation to purchase shares of the fund, as opposed to a direct investment in real estate, which requires ownership in actual land and buildings. Although leverage is allowed, the fund’s policy objective shall not exceed a total of 30% across the entire portfolio (or 40% on a market value basis).
 
Individual Properties - Real estate investments in individual properties will be evaluated on a case by case basis by the Finance Committee. If an individual property investment is deemed to be appropriate, the Finance Committee will seek approval to invest from the Executive Committee.
 
For both types of real estate investments described above, it is the policy of the Foundation, where possible, to seek investment vehicles which do not generate Unrelated Business Taxable Income (UBTI). UBTI is income earned by a tax-exempt entity that does not result from tax-exempt activities. As the Foundation may owe taxes on this income, each investment should be carefully reviewed. 
 
 
 E. Global Balanced/Multi-Asset:
 
Global Balanced/Multi-Asset allocations are diversified portfolios invested in a range of equity and bond markets, both domestically and internationally. Managers in these allocations may vary the weighting in each asset class based on the relative attractiveness of the asset class. The strategies may have similar characteristics to some absolute return strategies, but typically have daily liquidity, similar to equity and bond allocations.
 
F. Alternative Investments:
 
Alternative investments are non-traditional investments that have low correlation with most traditional asset classes. Alternative investments are usually transacted through a partnership structure and are often characterized by limited liquidity, infrequent valuations, and the need for greater administrative workload and oversight. The Committee recognizes that additional investment classes may reduce the Foundation’s investment performance volatility and/or enhance overall performance. It is the intent of the Committee to place a portion of assets specified in SCHEDULE I in investment categories such as:
 
-          Absolute Return Strategies
-          Real Return Strategies
-          Private Equity
 
Definitions, as well as manager performance objectives, for each alternative asset class specified above can be found in Exhibit A of this Policy.
 
The investment criteria and guidelines for alternative asset class investment managers and all other investment managers utilizing a mutual fund or commingled fund will be subject to the prospectus, offering circular, or other offering documents prepared by the investment manager. It is the policy of the Foundation, where possible, to seek investment vehicles which do not generate Unrelated Business Taxable Income (UBTI).
 
If the foundation receives property, which is not a qualified investment under these guidelines, the Finance/Investment Committee is directed to dispose of the property and reinvest the proceeds in qualified investment within a reasonable period. Exceptions require the approval of the Executive Committee.
 
VII.  INVESTMENT MANAGEMENT – GENERAL GUIDELINES
 
A.                Proxy Voting: The investment manager(s) shall have the sole and exclusive right to vote any and all proxies solicited in connection with the securities held by the Foundation. The investment manager(s) shall furnish the Finance Committee with a written proxy voting policy statement, and shall keep records with respect to its voting decisions and submit a report annually to the Finance Committee summarizing votes cast.
 
B.                 Trading and Execution: The investment manager(s) shall use their best efforts to obtain execution of orders through responsible brokerage firms at the most favorable prices and competitive commission rates.
 
C.                 Investment Performance Review and Evaluation:
1.      The Finance Committee will review the investment results of the investment manager(s) at least quarterly. Performance comparisons will be made against a representative performance universe and the performance objectives set forth in this policy statement. A comprehensive annual report from the Finance Committee will be presented to the full Board of Directors.
 
2.      The Finance Committee, with the assistance of the investment consultant, shall periodically review the qualitative developments of each investment manager. This evaluation should include: changes in ownership, personnel turnover, adherence to investment style and philosophy, and any other qualities that the Finance Committee deems appropriate. This review should also include an assessment as to whether each investment manager has operated within the scope of this Investment Policy.
 
3.      The investment manager(s) must disclose all major changes in organization or investment philosophy to the Finance Committee members within 30 days. Further, all registered investment advisors must present updated ADV-2 forms on an annual basis to the Finance Committee.
 
4.      It is expected that professional management responsible for these funds shall report not less than quarterly on the performance of the portfolio, including comparative gross returns for the funds and their respective benchmarks, as well as a complete accounting of all transactions involving the Foundation’s investments during the quarter, together with a statement of beginning balance, fees, capital appreciation, income and ending balance for each account.
 
Professional investment management is encouraged to report routinely to the ED and to the Finance Committee. Additional meetings with the Finance Committee or the Board may be requested.
 
D.                Corrective Action:
Corrective action should be taken naturally as a result of the ongoing review process of investment managers. While there may be unusual occurrences at any time, the following are instances where corrective action may be in order:
 
1.      Any organizational change that may materially affect the management process will be noted by the investment management and discussed with the Finance Committee. If the Finance Committee deems appropriate, the investment manager may be called upon to discuss changes.
 
2.      Violation of terms of contract without prior approval for the Finance Committee constitutes grounds for termination.
 
3.      As part of its overall asset allocation strategy, the Finance Committee will select managers with certain styles and approaches to portfolio diversification. Therefore, it is critical that managers adhere to the original intent of the Finance Committee. Should either the consultant of staff ascertain that significant changes in investment style have occurred, this may be grounds for termination.
 
4.      Managers may be replaced at any time as part of an overall restructuring.
 
E.                 Policy Changes:
The investment consultant shall advise the ED and/or the Finance Committee of any restrictions within this Investment Policy that may prevent the investment manager(s) from obtaining the objectives and goals set forth herein. Any violation of the investment guidelines or other sections of the Investment Policy discovered by the investment consultant in the preparation of its regular performance review shall be reported immediately to the Finance Committee and discussed at their next regularly scheduled meeting.
 
F.                  Investment Policy Review and Revisions:
The Board of Directors reserves the right to amend the Investment Policy at any time they deem such amendment to be necessary, or to comply with changes in federal law as these changes affect the investment of the Foundation’s assets.
 
The Investment Policy shall also be reviewed annually to ensure compliance and relevance to the current law, financial and economic trends, and to meet the cash flow requirements of the Foundation.
 
VIII. ALTERNATIVE INVESTMENTS - VALUATION AND CONTROLS
 
The following policy shall pertain to all Alternative Investments. Alternative Investments shall be defined as any investment in private equity, non-listed and market priced absolute return strategies, non-listed and market priced vehicles investing in real estate, non-listed and market priced vehicles investing in commodities, non-listed and market priced offshore vehicles, and non-listed and market priced commingled funds. 
 
The named Investment Manager for each such Alternative Investment shall provide, in writing, the policies and procedures used in periodic portfolio valuation. These policies and procedures along with portfolio composition are to be reviewed with the client at least annually. At a minimum, the manager will address the following:
 
•     Nature of underlying investments, including factors such as complexity, liquidity, volatility, and frequency of trading
•     Methodology and assumptions used in valuation
•     Checks and balances in place to ensure a fair valuation process
 
Furthermore, the Investment Manager will also notify the HSUAF immediately regarding any changes made to the valuation methodology or the assumptions used in the valuation process. The Investment Manager is also responsible for providing audited financial statements at least annually, and non-audited statements on at least a quarterly basis.
 
XI. SOCIALLY RESPONSIBLE INVESTING
 
The Board of Trustees of the California State University adopted a resolution urging auxiliary boards, which make corporate investments to issue statements of social responsibility and to follow those precepts in examining past and considering future investment policies. The Foundation Board of Directors recognizes and accepts its social responsibility with respect to the investment of funds.



SCHEDULE I
 
Allocation of Assets
 
The target asset allocation for the Foundation is determined by the Committee to facilitate the achievement of the Foundation’s long-term investment objectives within the established risk parameters. Due to the fact that the allocation of funds between asset classes may be the single most important determinant of the investment performance, the long-term Foundation assets shall be divided into the following asset classes:
 
 
Asset Class
Minimum Percent
Target
 Percent*
Maximum Percent
Large Cap U.S. Equities
12%
22%
32%
Small Cap U.S. Equities
5%
10%
15%
Non-US Equities
14%
19%
24%
Fixed Income
12%
22%
32%
Cash & Equivalents
0%
0%
3%
Real Estate
0%
5%
10%
Global Balanced/Multi-Asset
5%
10%
15%
Real Return
7%
12%
17%
Absolute Return*
0%
0%
0%
Private Equity*
0%
0%
0%
 
*Absolute Return and Private Equity may be evaluated by the Committee in the future to determine whether these asset classes are appropriate for a target allocation.

 
 
 
The target allocations described in the table above exclude the market value of a real estate investment made by the Foundation in August 2008. The University Annex Building located at 1340 “C” Street in Arcata, CA was purchased for $1,678,546.00 of cash. In exchange for use of this property, Humboldt State University has entered into an agreement with the Foundation whereby the University will be responsible for monthly lease payments to the Foundation that total $134,284.00 per year (8% of the cash amount paid) plus insurance and reasonable administrative costs. The agreement with the University is intended to remain in place until the California State University System purchases the building from the Foundation on behalf of the University.
 
Up to the total amount of the Foundation’s approved spending and fees for the current and/or upcoming fiscal year may be held in low duration fixed income investments to reduce the expected volatility of these assets prior to distribution. Any such low duration fixed income investments will be excluded from the long-term target allocations described in the table above and will be subject to the same investment management guidelines detailed in this Investment Policy for fixed income investments.
 



Liquidity:
 
The Finance Committee will monitor the Foundation’s cash flow on a regular basis, and sufficient liquidity shall be maintained to fulfill the spending objectives and operational costs of the Foundation. When withdrawals become necessary, the Finance Committee will notify the investment manager(s) as far in advance as possible to allow them sufficient time to acquire the necessary liquid reserves.
 
Rebalancing
 
The Committee, on an ongoing basis and in accordance with market fluctuations, will rebalance the investment portfolio so it remains within the range of targeted asset allocations, and the planned distribution among investment managers. 
 
A rebalancing procedure as deemed appropriate by the Committee will be implemented, at least annually, or when significant cash flows occur to maintain the allocation of assets within the appropriate ranges.
 
Formal asset allocation studies may be conducted at least every two years, with annual evaluations of the validity of the adopted asset allocation.



EXHIBIT A
 
            Performance Monitoring Return Expectations
 
Performance measurement shall be based on total rate of return and shall be monitored over a sufficient time period to reflect the investment expertise of the investment manager(s) over one full market cycle, or five years, whichever is less.
 
            Total Portfolio
 
            The total account will be evaluated quarterly. Specific performance objectives include, but may not be limited to, the following:
 
1.         Achieve an annual total rate of return of at least 4.5% plus the consumer price index (CPI) over a market cycle, or five years, whichever is less;
 
2.         Exceed the return of an Actual Allocation Index created by weighting appropriate indexes (i.e.: Barclays Aggregate, S&P 500, etc.) according to the portfolio’s actual manager weighting at the beginning of each month over a market cycle, or five years, whichever is less;
 
3.         Rank above median in a universe of other endowment/foundation funds over a market cycle, or five years, whichever is less. 
 
The performance expectations for the individual asset classes set forth below apply only to actively managed portfolios. All indexed investments are expected to provide a return that is comparable to the tracked benchmark on a gross of fees basis.
 
            U.S. Equities - Large Capitalization
Large capitalization U.S. equity represents investments made in companies within the United States, with market capitalizations typically greater than $10 billion. The capitalization of a company is calculated by multiplying the number of shares outstanding by the price per share. Large capitalization U.S. equity accounts will be evaluated quarterly. Specific performance objectives include, but may not be limited to, the following:
 
            1.   Exceed the return of the appropriate S&P 500 or Russell 1000 style benchmark net of fees over a market cycle, or five years, whichever is less.
 
2.     Rank above median in a nationally recognized universe of equity managers possessing a similar style.
 
            U.S. Equities – Small/Mid Capitalization
            Small/mid capitalization U.S. equity represents investments made in companies within the United States, with market capitalizations typically less than $10 billion. The capitalization of a company is calculated by multiplying the number of shares outstanding by the price per share.  Small capitalization U.S. equity accounts will be evaluated quarterly. Specific performance objectives include, but may not be limited to, the following:
 
            1.     Exceed the return of the appropriate Russell 2000, Russell 2500 or Russell Midcap style benchmark net of fees over a market cycle, or five years, whichever is less.
 
2.         Rank above median in a nationally recognized universe of equity managers possessing a similar style.
           
            Non-U.S. Equities
            Non-U.S. equity represents investments made in companies headquartered and traded on stock exchanges outside of the United States. Non-U.S. equity accounts will be evaluated quarterly. Specific performance objectives include, but may not be limited to, the following:
 
            1.     Exceed the return of the appropriate MSCI All Country World exUS or MSCI EAFE style benchmark net of fees over a market cycle or five years, whichever is less.
           
            2.     Rank above median in a nationally recognized universe of international equity managers possessing a similar style.
 
            Fixed Income
            Fixed income represents investments in the bonds issued by corporations and government and related organizations, typically within the United States. Fixed income accounts will be evaluated quarterly. Specific performance objectives include, but may not be limited to, the following:
 
1.   Exceed the Return of the Barclays Aggregate Index net of fees over a market cycle, or five years, whichever is less.
 
2.   Rank above median in a nationally recognized universe of fixed income managers possessing a similar style.
 
            Real Estate
Real estate represents investments in many individual properties, accessed through commingled funds. Common property types associated with real estate investing are apartments, office buildings, retail centers, and industrial parks. Domestic real estate investment portfolios generally own many geographically diverse properties across the United States. Real estate managers will be evaluated quarterly. Specific performance objectives include, but may not be limited to, the following:
 
1.      Exceed the return on the NCREIF Fund Index – Open-End Diversified Core Equity (NCREIF ODCE Index) net of fees over a market cycle, or five years, whichever is less.
 
Global Balanced/Multi-Asset
Similar to absolute return, global balanced, or “Global Tactical Asset Allocation” strategies seek to exploit inefficiencies across multiple asset or sub-asset classes.  Unlike hedge funds, global balanced managers typically utilize low levels of leverage, shorting, and derivatives, in a liquid mutual fund or commingled fund vehicle.  Global balanced managers will be evaluated quarterly. Specific performance objectives include, but may not be limited to, the following:
 
1.         Exceed the return of a 60% MSCI All Country World Index/40% Barclays U.S. Aggregate Bond Index benchmark net of fees over a market cycle, or five years, whichever is less.
2.         Exceed the return of a custom index comprised of the benchmarks of the underlying asset classes utilized by the fund net of fees over a market cycle, or five years, whichever is less.
 
 
Absolute Return
Absolute return represents a type of hedge fund of funds that uses different strategies, such as short selling and hedge equities to seek positive returns, regardless of market direction. The rewards of hedge fund managers are usually heavily geared towards the performance of their funds. A fund of funds is when managers invest in a group of single manager hedge funds or managed accounts, which may utilize a variety of investing strategies, creating a diversified investment vehicle for its investors. Absolute return managers will be evaluated quarterly. Specific performance objectives include, but may not be limited to, the following:
 
1.   Exceed the return of the HFN Fund of Funds – Multi-Strategy Index net of fees over a market cycle, or five years, whichever is less.
 
Real Return
Real return strategies target a return that exceeds inflation by a premium (ex. CPI + 5%). Real return managers typically invest in a core of “real” return assets, such as TIPS, commodities, and real estate, as well as traditional asset classes such as equity and fixed income. Additionally, managers attempt to add value by tactically allocating to asset classes they perceive to be undervalued, thus contributing to the “real” return orientation. Real return managers will be evaluated quarterly. Specific performance objectives include, but may not be limited to, the following:
 
1.      Exceed the increase in the consumer price index (CPI) by at least five percent (5%) annually net of fees over a market cycle, or five years, whichever is less.
2.      Exceed the return of a custom index comprised of the benchmarks of the underlying asset classes utilized by the fund annually net of fees over a market cycle, or five years, whichever is less.
 
            Private Equity
Private equity represents investments in Venture Capital, Buyouts, Mezzanine, and Distressed Debt. Typically Private Equity is accessed through a fund of funds approach. A fund of funds is when managers invest in a group of funds or managed accounts, each of which creates funds of managers employing different strategies, thus creating a diversified investment vehicle for its investors. Private equity managers will be evaluated quarterly. Specific performance objectives include, but may not be limited to, the following:
 
1.      Exceed the increase in the S&P 500 Index by at least five percent (5%) annually net of fees over a market cycle, or five years, whichever is less;
 
2.      Exceed the Venture Economics Private Equity median return for the appropriate vintage year.
 
 
 
 
 
 
 

 

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