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Title: BOT Investment Statement (Investment Policy)
Subject: Board of Trustees
Policy No: FIN: 2015:19
Applies: University-Wide
Issuing Authority: President
Responsible Officer: Senior Vice President for Finance and CFO
Adopted: 06/10/2015
Last Revision: 111/1216/20182020
Last Reviewed: 111/1216/20182020

I.  PURPOSE

1. This Statement is set forth by the Rowan University Board of Trustees (the "BOT") in order to:
1. Clearly define and assign the responsibilities of all involved parties.
2. Clearly identify the goals, restrictions and requirements required by all involved parties regarding the investment and management of the University's Managed Assets.
3. Establish a basis for evaluating investment results.

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1. Standards of Care
   
   1. Ethics and Conflicts of Interest
      1. Board Members involved with the investment process shall refrain from personal business activity that may conflict with the proper execution of the investment program or impair their ability to make impartial investment decisions.
   2. Prudent Investor Standard
      1. The Uniform Prudent Management of Institutional Funds Act (UPMIFA) provides the consistent fiduciary standard for charitable board members, officers, trustees, consultants, investment managers and all other parties involved in the stewardship of the investment assets of Rowan University.
      2. In managing and investing the assets, the Investment Committee shall follow guidelines for the Managed Assets according to prudent standards established in the Uniform Prudent Management of Institutional Funds Act (UPMIFA) as adopted in New Jersey on March 9, 2009.  As fiduciaries, Rowan University 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 familiar with such matters would use in the investment of a fund of like character and with like aims.
2. Investment Objective and Strategies
   1. The University's three primary investment objectives, in order of priority and importance, are:
      1. Safety: preservation of principal is the foremost objective;
      2. Liquidity: investments shall be made for such periods, and in such investments, as to meet all liquidity needs of the University; and
      3. Return on investment: within the constraints listed above, the Investment Committee should invest funds in a manner that maximizes investment return.
   2. These objectives are to be achieved through diversification of the Managed Assets in a coordinated portfolio, as described in this IPS, and by periodically rebalancing the portfolio, as further described in this IPS, to maintain the desired asset allocation.
3. Asset Allocation
   1. The following Managed Asset allocation mix should be followed by the Investment Committee and maintained by the Foundation's investment managers:
      

      
      Short Term (less than one year)

      
      

      	Asset Mix Policy Minimum     Target    Maximum	Benchmarks
      Fixed Income	100.0%            100.0%         100.0%	BOA/Merrill Lynch 6 month T-Bill

      
      

      Intermediate Term (one to four years)

      
      

      	Asset Mix Policy Minimum     Target    Maximum	Benchmarks
      Fixed Income	100.0%            100.0%         100.0%	Barclays 1-3 Year Aggregate Bond

      
      

      Long Term (5-10 years)

      
      

      	Asset Mix Policy Minimum     Target    Maximum	Benchmarks
      Equity    U.S. Equity    International Equity Total Fixed Income    Fixed-Income    Total	10.0%                12.5%          15.0%     5.0%                  7.5%          10.0%  15.0%               20.0%        25.0%  75.0%                80.0%          85.0% 75.0%               80.0%          85.0%	Russell 3000 MSCI ACWI Ex-US Barclays 1-3 Year Aggregate
      Total	100%	80% Barclays 1-3 Year Aggregate 12.5% Russell 3000 7.5% MSCI ACWI Ex-US

      
      

       Quasi Endowment (10+ years)

      
      

      	Asset Mix Policy Minimum     Target    Maximum	Benchmarks
      Equity    U.S. Equity    International Equity Total Fixed Income    Fixed-Income    Total	32.5%                37.5%          42.5%   17.5%                22.5%          27.5%  50.0%              60.0%        70.0%  30.0%                40.0%          50.0% 30.0%                40.0%          50.0%	Russell 3000 MSCI ACWI Ex-US Barclays 1-3 Year Aggregate
      Total	100%	40% Barclays 1-3 Year Aggregate 37.5% Russell 3000 22.5% MSCI ACWI Ex-US

4. Rebalancing
   
   1. It is acknowledged and understood that different asset classes perform differently during any given period. To compensate for such drift, the portfolio will be reviewed periodically to identify rebalancing opportunities.
   2. If the Investment Committee determines that rebalancing is necessary, the Committee may re-direct assets from one or more Investment Managers to other Investment Managers as it deems appropriate, and/or direct each Investment Manager to re-balance the assets its manages. The Senior Vice President for Finance and Chief Financial Officer will periodically advise the Investment 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.
      
      
5. Additional Guidelines for Managing Asset
   1. Short term fixed income may consist of: 
      1. U.S. Treasury Bills
      2. Federally insured certificates of deposits that mature in 1 year or less
      3. Federally insured demand deposits
      4. Money Market Funds that invest exclusively in U.S. Treasury Securities
      5. Commercial paper, each with maturity of 1 year or less that is rated "A1/P1" or higher by at least one of the major rating agencies. If unrated, it must be considered by the Investment Manager to be equivalent to an "A1/P1" rating.
      6. 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.
      7. 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.
      8. Asset-backed securities, mortgage-backed securities, commercial mortgage-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.
   2. Investment Grade Bonds, American Depositary Receipts, open-end mutual funds, closed-end mutual funds, exchange-traded funds and separately managed accounts are permissible investments for the Long Term Portfolio and for the Intermediate Term Portfolio, to the extent such investments are limited to fixed income investments. Investment Grade bonds are defined as those rated 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 would be considered an A- rated security).
   3. Except for government and agency obligations, each fixed income manager's portfolio shall contain no more than 10% of any single issue, at cost. In addition, except for government and agency obligations, the total fixed income portfolio (Intermediate Term and Long Term) shall contain no more than 5% of any single issue, at cost. For structured securities, "issue" is defined as a discrete trust (ie: AMCAR 2013-1 is a different issue than AMCAR 2012-1).
   4. 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 stated final maturity of the security, or the unconditional put option date if the security contains such a provision. Term or tenure shall mean the remaining time to maturity from the settlement date. For those securities which 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.
   5. Including all issues, the average weighted duration of the total fixed income portfolio of each income manager shall be within +/- 30% of the comparative benchmark index's duration.
   6. Individual equity holdings shall not exceed more than 5% of the market value of the total market value of the issuer.
   7. There shall be a liquid, public market for each issue selected.
   8. Investment Managers(s) may not directly engage in the following:
      1. Use margin or otherwise borrow funds for the acquisition of any security.
      2. Invest in futures or options.
      3. Purchase real estate, oil and gas properties, or other natural resources related properties with the exception of marketable real estate securities, mutual funds or exchange-traded funds.
      4. Purchase investments in limited partnerships except for publicly traded Master Limited Partnerships.
      5. Purchase investments based on material, non-public information.
      6. Invest in individual securities of issuers which the BOT in its sole discretion determines are engaged in businesses that are inconsistent with the mission of the Organization.
         
         
6. Cash Distributions
   1. The Board will determine the schedule and amount of cash disbursements required from the portfolio.

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