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Endowment Board University of North Carolina

Endowment Board University of North Carolina. Wilmington April 3 , 2014. 1. 2. Endowment Board University of North Carolina Wilmington. Thursday, April 3, 2014 at 3:00 pm Masonboro Island Room, Fisher Student Center Agenda. Welcome Ms. Wendy Murphy

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Endowment Board University of North Carolina

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  1. Endowment BoardUniversity of North Carolina Wilmington April 3, 2014 1

  2. 2 Endowment BoardUniversity of North Carolina Wilmington Thursday, April 3, 2014 at 3:00 pm Masonboro Island Room, Fisher Student CenterAgenda Welcome Ms. Wendy Murphy Approve Minutes of October 24, 2013 Ms. Wendy Murphy Results of FY 2013 NACUBO Endowment Study Ms. Roberta LaSure Endowment Portfolio at February 28, 2014 (unaudited) Ms. Roberta LaSure Endowment Performance Returns through February 28, 2014 Ms. Roberta LaSure Request for Proposal: Investment Consulting ServicesMr. Charles Maimone/Dr. Rick Whitfield Update: BOG Approval of UNCW Request of a For-Profit Associated Entity Mr. Rob Hoon/Mr. Charles Maimone Closed Session Mr. Charles Maimone Adjournment Ms. Wendy Murphy

  3. 3 2013 NACUBO Endowment Study For the Year Ended June 30, 2013

  4. NACUBO Endowment Study Overview • 835 U.S. endowments and affiliated foundations participated in the 2013 NACUBO-Commonfund Study of Endowments (NCSE) • All data is through June 30, 2013 • The breakdown of participating institutions is by size below

  5. NACUBO Endowment Study: Average Returns of Top Performers and Select Portfolio Sizes

  6. NACUBO Endowment Study: Asset Allocation of Top Performers and Select Portfolio Sizes

  7. NACUBO Endowment Study: Spending Policy and Long-Term Return Objectives

  8. NACUBO Endowment Study: Internal Chief Investment Officer

  9. NACUBO Endowment Study: Outsourced Investment Consultant

  10. 10 ENDOWMENT PORTFOLIO INVESTMENT STATEMENT At February 28, 2014

  11. ConsolidatedEndowment Investment Activity thru February 28, 2014

  12. University’s Endowment Investment Activity thru February 28, 2014

  13. Foundation’s Endowment Investment Activity thru February 28, 2014

  14. 14 ENDOWMENT INVESTMENT PERFORMANCE RETURNS Through February 28, 2014

  15. Endowment Portfolio Returns @ February 28, 2014

  16. Endowment Fund Manager Returns @ February 28, 2014

  17. 17 INVESTMENT COMMITTEE INTIATIVES

  18. Background: Investment Committee Initiatives • Results of combined efforts of Endowment & Foundation Investment Committees over past few years: • Updated and revised Investment Policy Statement (IPS) • Systematic review of asset allocation at portfolio level • Refined Investment Performance Report against benchmarks • Committees recommended UNCW staff’s next project be an assessment of our current investment management structure relative to spectrum of services offered in marketplace

  19. UNCW Endowment at a Glance Endowment • Total investable assets of $76M for University and $3M for Foundation • Currently utilizing “hybrid” approach • Two outsourced CIO managed funds – UNCMC and TIFF, representing 73% of assets • UNCW is “little fish in big pond” – receive little attention from managers • Structure of each managed pool is a “fixed menu” – no customization • Two direct mutual fund investments with GMO, representing 23% of assets Endowment Board • 7 Trustees • Quarterly meetings UNCW Staff • VC of Business Affairs, Associate VC Finance & Director of Endowment Accounting

  20. Catalysts For Change in Oversight & Management Issues Facing Institutional Investors • Progressively more complex and volatile markets • Increased complexity in strategies and financial instruments • Increased time and expertise required for proper oversight • Expectations of a potentially lower return environment • Growing emphasis on risk adjusted performance returns Issues Facing Smaller & Mid-Size Universities • Limited resources to develop in-house investment capabilities • Lack economies of scale • Building donor confidence Issues Facing University Investment Committees • Trustee Succession – loss of continuity as trustees roll off committees • Active asset management no longer a desirable role • Focus on governance and policy; reviewing asset allocation and performance returns against benchmarks

  21. Participants in Process • Endowment & Foundation Board member participants in this process: • Britt Preyer • Edward Alexander • Steve Warwick • Hank Miller • Jason Wheeler • Chad Paul • David Hartness • Charles Mattox • Robert Keith • UNCW Staff participants in this process: • Vice Chancellor for Business Affairs • Associate Vice Chancellor for Finance • Director of Endowment Accounting

  22. 22 Request for Information (RFI) • UNCW issued Request for Information (RFI) in July, 2013 to conduct assessment and gather relevant information on the spectrum of investment consulting services offered in marketplace • UNCW staff reviewed all 40 responses and recommended on-campus visits from 3 firms whose core client base consist of higher education institutions, who offer full range of discretionary services, and who are not a subsidiary of a larger holding company • Visits from following (3) firms completed on January 15, 2014: • Fund Evaluation Group • Hirtle Callaghan • Cambridge Associates

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  24. 24 ThreeCommonOCIOModels Singlecommingledfund Ex: UNCMC, TIFF Multiplecommingled funds Multiple direct investments Noownershipof managers Complex administration Cashin/cashout Not Customized Fully Customized

  25. Next Steps: Request for Proposal • Investment committee members and other Board participants recommended issuing a Request for Proposal for outsourced Chief Investment Officer (CIO) services with full discretion

  26. 26 Endowment BoardUniversity of North Carolina Wilmington Thursday, April 3, 2014 at 3:00 pm Masonboro Island Room, Fisher Student CenterAgenda Welcome Ms. Wendy Murphy Approve Minutes of October 24, 2013 Ms. Wendy Murphy Results of FY 2013 NACUBO Endowment Study Ms. Roberta LaSure Endowment Portfolio at February 28, 2014 (unaudited) Ms. Roberta LaSure Endowment Performance Returns through February 28, 2014 Ms. Roberta LaSure Request for Proposal: Investment Consulting ServicesMr. Charles Maimone/Dr. Rick Whitfield Update: BOG Approval of UNCW Request of a For-Profit Associated Entity Mr. Rob Hoon/Mr. Charles Maimone Closed Session Mr. Charles Maimone Adjournment Ms. Wendy Murphy

  27. 27 Endowment BoardUniversity of North Carolina Wilmington Thursday, April 3, 2014 at 3:00 pm Masonboro Island Room, Fisher Student CenterAgenda Welcome Ms. Wendy Murphy Approve Minutes of October 24, 2013 Ms. Wendy Murphy Results of FY 2013 NACUBO Endowment Study Ms. Roberta LaSure Endowment Portfolio at February 28, 2014 (unaudited) Ms. Roberta LaSure Endowment Performance Returns through February 28, 2014 Ms. Roberta LaSure Request for Proposal: Investment Consulting ServicesMr. Charles Maimone/Dr. Rick Whitfield Update: BOG Approval of UNCW Request of a For-Profit Associated Entity Mr. Rob Hoon/Mr. Charles Maimone Closed SessionMr. Charles Maimone Adjournment Ms. Wendy Murphy

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