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BOT Investment Statement ("Investment Policy")
BOT Investment Statement ("Investment Policy")
ROWAN UNIVERSITY P=
OLICY
Title:=
BOT Investment Statement (Investment Policy)
Subject: Board of Trustees
Policy No=
: FIN: 2015:19
Applies: Universi=
ty-Wide
Issuing Authority: President
=
Responsible Officer: Senior Vice President for Finance=
and CFO
Adopted: 06/10/2015
L=
ast Revision: 06/07/2021
Last Reviewed: 08/29/=
2022
<=
strong>I. PURPOSE
- This Statement is set forth by the Rowan University Board of Trustees (=
the "BOT") in order to:
- Clearly define and assign the responsibilities of all involved parties.=
- Clearly identify the goals, restrictions and requirements required by a=
ll involved parties regarding the investment and management of the Universi=
ty's Managed Assets.
- Establish a basis for evaluating investment results.
II. ACCOUNTABILITY
This Investment Policy Statement (the =E2=
=80=9CIPS=E2=80=9D) dictates the investment and management of the =E2=80=9C=
Managed Assets=E2=80=9D of Rowan University (the =E2=80=9CUniversity=E2=80=
=9D).
III. APPLICABILITY
This policy applies to all Rowan Universi=
ty employees attending to the investment and management of the managed Asse=
ts of Rowan University.
IV. DEFINITIONS
- Budget & Finance Committee means the standing Committee of the Univ=
ersity Board of Trustees (the =E2=80=9CBOT=E2=80=9D).
- Fiduciaries mean individuals that undertake an obligation to exercise p=
rudence, responsibility and authority in making decisions in connection wit=
h managing the assets of the Foundation (or as further defined by applicabl=
e law).
- Foundation means the Rowan University Foundation.
- Investment Committee means the Committee of the Foundation Board of Dir=
ectors that oversees the management of the investments of the Foundation.=
li>
- Investment Policy Statement means this document.
- Managed Assets means those assets, funds, or investments to be managed =
by the Foundation=E2=80=99s Investment Committee.
- Money Manager / Investment Manager means an individual or organization =
employed to manage the investments of all or part of the Managed Assets. A =
Money Manager / Investment Manager can provide services in a variety of way=
s including separately managed funds, ETFs, etc.
- Broker means an individual or organization that sells investments.
V. REFERENCE
- Uniform Prudent Management of Instit=
utional Funds Act (UPMIFA) as adopted in New Jersey on March 9, =
2009.
<=
strong>VI. POLICY
- Standards of Care
- Ethics and Conflicts of Int=
erest
- Board Members involved with the investment process shall refrain from p=
ersonal business activity that may conflict with the proper execution of th=
e investment program or impair their ability to make impartial investment d=
ecisions.
- Prudent Investor Standard=
span>
- The Uniform Prudent Management of Institutional Funds Act (UPMIFA) prov=
ides the consistent fiduciary standard for charitable board members, office=
rs, trustees, consultants, investment managers and all other parties involv=
ed in the stewardship of the investment assets of Rowan University.
- In managing and investing the assets, the Investment Committee shall fo=
llow guidelines for the Managed Assets according to prudent standards estab=
lished in the Uniform Prudent Management of Institutional Funds Act (UPMIFA=
) as adopted in New Jersey on March 9, 2009. As fiduciaries, Rowan Un=
iversity Foundation Investment Committee will manage the investment of all =
funds with the care, skill, prudence and diligence under the circumstances =
then prevailing that a prudent investor acting in like capacity and familia=
r with such matters would use in the investment of a fund of like character=
and with like aims.
- Investment Objective and Strategies
- The University's three primary investment objectives, in order of prior=
ity and importance, are:
- Safety: preservation of principal is the foremost objective;=
li>
- Liquidity: investments shall be made for such periods, and in =
such investments, as to meet all liquidity needs of the University; and
- Return on investment: within the constraints listed above, the=
Investment Committee should invest funds in a manner that maximizes invest=
ment return.
- These objectives are to be achieved through diversification of the Mana=
ged Assets in a coordinated portfolio, as described in this IPS, and by per=
iodically rebalancing the portfolio, as further described in this IPS, to m=
aintain the desired asset allocation.
- Asset Allocation
- The following Managed Asset allocation mix should be followed by the In=
vestment Committee and maintained by the Foundation's investment managers:<=
br>
Short Term (less than one year)
|
Asset Mix Policy <=
p>Minimum Target Maximum<=
/strong> |
Benchmarks |
Fixed Income |
100.0% &nb=
sp; 100.0%  =
; 100.0% |
BOA/Merrill Lynch 6 month T-Bill=
p>
|
Intermediate Term (one to four years)
=
|
Asset Mix Policy <=
p>Minimum Target Maximum<=
/strong> |
Benchmarks |
Fixed Income <=
p>
|
100.0% &nb=
sp; 100.0%  =
; 100.0% |
Barclays 1-3 Year Aggregate Bond=
p>
|
Long Term (5-10 years)
|
Asset Mix Policy <=
p>Minimum Target Maximum<=
/strong> |
Benchmarks |
Equity U.=
S. Equity International Equity Total
Fixed Income Fixed-Income &nb=
sp; Total
|
10.0% &nbs=
p; 12.5%&=
nbsp; 15.0% &nb=
sp; 5.0% &=
nbsp; 7.5%  =
; 10.0% 15.0% <=
strong> &n=
bsp; 20.0% 2=
5.0%
75.0% =
80=
.0% 85.0% 75.0% =
80.0% &nb=
sp; 85.0% =
|
Russell 3000 MSCI ACWI Ex-US=
Barclays 1-3 Year Aggregate <=
br> |
<=
/strong> Total |
<=
/strong> 100% |
80% Barclays 1-3 Year Aggregate 12.5% R=
ussell 3000 7.5% MSCI ACWI Ex-US |
Quasi Endowment (10+ years)
|
Asset Mix Policy <=
p>Minimum Target Maximum<=
/strong> |
Benchmarks |
Equity U.=
S. Equity International Equity Total
Fixed Income Fixed-Income &nb=
sp; Total
|
32.5% &nbs=
p; 37.5%&=
nbsp; 42.5% 17=
.5% =
22.5% &nb=
sp; 27.5% 50.0% &nb=
sp; 60.0%=
70.0% =
30.0% &nbs=
p; 40.0% =
50.0% 30.0%  =
; 40.0% &=
nbsp; 50.0% |
Russell 3000 MSCI ACWI Ex-US=
Barclays 1-3 Year Aggregate <=
br> |
<=
/strong> Total |
<=
/strong> 100% |
40% Barclays 1-3 Year Aggregate 37.5% R=
ussell 3000 22.5% MSCI ACWI Ex-US |
- Rebalancing
- It is acknowledged and understood that different asset classes perform =
differently during any given period. To compensate for such drift, the port=
folio will be reviewed periodically to identify rebalancing opportunities.<=
/li>
- If the Investment Committee determines that rebalancing is necessary, t=
he Committee may re-direct assets from one or more Investment Managers to o=
ther Investment Managers as it deems appropriate, and/or direct each Invest=
ment Manager to re-balance the assets its manages. The Senior Vice Presiden=
t for Finance and Chief Financial Officer will periodically advise the Inve=
stment Committee and Associate Vice President for Advancement and Executive=
Director of the Foundation on the desired mix between short, intermediate =
and long term asset classes.
- Additional Guidelines for Managing Asset
- Short term fixed income may consist of:
- U.S. Treasury Bills
- Federally insured certificates of deposits that mature in 1 year or les=
s
- Federally insured demand deposits
- Money Market Funds that invest exclusively in U.S. Treasury Securities<=
/li>
- Commercial paper, each with maturity of 1 year or less that is rated "A=
1/P1" or higher by at least one of the major rating agencies. If unrated, i=
t must be considered by the Investment Manager to be equivalent to an "A1/P=
1" rating.
- Corporate bonds, each with a maturity of 1 year or less that are rated =
investment grade by at least one of the major bond rating agencies.
- Municipal bonds, each with a maturity of 1 year or less that are rated =
investment grade by at least one of the major rating agencies.
- Asset-backed securities, mortgage-backed securities, commercial mortgag=
e-backed securities that have a duration of less than 1 year that are rated=
investment grade by a least one of the major rating agencies.
- Investment Grade Bonds, American Depositary Receipts, open-end mutual f=
unds, closed-end mutual funds, exchange-traded funds and separately managed=
accounts are permissible investments for the Long Term Portfolio and for t=
he Intermediate Term Portfolio, to the extent such investments are limited =
to fixed income investments. Investment Grade bonds are defined as those ra=
ted by at least one rating agency as "Baa3/BBB-" or higher. For securities =
that are split-rated, the higher rating shall apply (i.e. A-/Baa1 bond woul=
d be considered an A- rated security).
- Except for government and agency obligations, each fixed income manager=
's portfolio shall contain no more than 10% of any single issue, at cost. I=
n addition, except for government and agency obligations, the total fixed i=
ncome portfolio (Intermediate Term and Long Term) shall contain no more tha=
n 5% of any single issue, at cost. For structured securities, "issue" is de=
fined as a discrete trust (ie: AMCAR 2013-1 is a different issue than AMCAR=
2012-1).
- Including all issues, the average weighted maturity of the total fixed =
income portfolio shall be maintained at a level not to exceed the benchmark=
index by more than 50%. Fixed income maturity for any one security should =
not be in excess of five (5) years and two weeks. Maturity shall mean the s=
tated final maturity of the security, or the unconditional put option date =
if the security contains such a provision. Term or tenure shall mean the re=
maining time to maturity from the settlement date. For those securities whi=
ch have reset dates or trade based on their average life, the reset date or=
average life will be used instead of the final maturity date for guideline=
purposes.
- Including all issues, the average weighted duration of the total fixed =
income portfolio of each income manager shall be within +/- 30% of the comp=
arative benchmark index's duration.
- Individual equity holdings shall not exceed more than 5% of the market =
value of the total market value of the issuer.
- There shall be a liquid, public market for each issue selected.
- Investment Managers(s) may not directly engage in the following:
- Use margin or otherwise borrow funds for the acquisition of any securit=
y.
- Invest in futures or options.
- Purchase real estate, oil and gas properties, or other natural resource=
s related properties with the exception of marketable real estate securitie=
s, mutual funds or exchange-traded funds.
- Purchase investments in limited partnerships except for publicly traded=
Master Limited Partnerships.
- Purchase investments based on material, non-public information.
- Invest in individual securities of issuers which the BOT in its sole di=
scretion determines are engaged in businesses that are inconsistent with th=
e mission of the Organization.
- Cash Distributions
- The Board will determine the schedule and amount of cash disbursements =
required from the portfolio.
VII. RESPONSIBILITIES
- Duties of the Board of Trustees
- The BOT's duties regarding the management of the University's investmen=
ts include:
- Developing and executing proper control procedures to assure compliance=
with this IPS.
- The BOT may assign these duties to a committee of the BOT or to the Uni=
versity's President, Senior Vice President for Finance and Chief Financial =
Officer or other executive, at its discretion. In such event, the responsib=
le party shall report to the Board, which shall retain authority to grant f=
inal approval for all material actions pertaining to the Managed Assets.
- Reviewing this Statement at least annually and executing changes as dee=
med prudent and appropriate.
- Role of the Foundation
- The University will use the Foundation and its Investment Committee to =
provide advice, expertise and oversight of the managed assets.
- Investment Committee
- The Investment Committee shall, as more fully described herein, oversee=
the management of the Managed Assets via a set of asset allocation targets=
and ranges for the portfolio. In fulfilling its responsibilities under thi=
s IPS, the Investment Committee shall, among other activities, hire and dis=
miss investment managers, agents and other advisors.
- The Investment Committee is authorized to make investment decisions and=
oversee the investment activities relating to the Managed Assets consisten=
t with this policy.
- The Investment Committee will:
- Comply with the Standards of Care included in this IPS.
- Determine the Asset Allocation of the assets, acting within the paramet=
ers of this IPS.
- Provide specific guidelines for the investment of assets.
- Establish separate accounts with appropriate Investment Managers and cu=
stodians to facilitate the buying, selling and maintenance of the Universit=
y's Managed Assets within the guidelines established in this IPS.
- Oversee the assets and review investment performance, in addition to mo=
nitoring the IPS.
- Review and, where possible, control investment expenses. All expenses m=
ust be customary and reasonable, and will be borne by the portfolio as deem=
ed appropriate and necessary.
- Provide investment monitoring reports on a quarterly basis and at other=
times as directed by the Budget and Finance Committee. The Executive Direc=
tor of the Foundation shall be responsible to the Investment Committee for =
maintaining detailed records of all invested funds and for carrying out the=
investment policies and procedures established by the Investment Committee=
.
- Inform the BOT of any material change in its investment management proc=
ess, including but not limited to changes in personnel, structure, fees, se=
rvices or investment philosophy.
- Review this IPS, along with those retained to assist the Investment Com=
mittee, recommending changes to the Budget and Finance Committee.
- Utilize the services of a broker that sells fixed income investments fo=
r the purposes of creating a "laddered" portfolio of bonds, if it deems suc=
h to be prudent and advisable.
- The Investment Committee will insure that any of its Separate Account M=
oney Managers/Investment Managers will maintain errors and omissions liabil=
ity insurance coverage, bonding, capital or other requirements as stipulate=
d and in amounts satisfactory to the Investment Committee, and documenting =
to the BOT at least annually that these requirements are satisfied.
Originally Approved: 6/2015
Reviewed: 8/29/2022 Budget & Finance Committee
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