Investment management and governance

The University's investable funds come from a variety of sources. We allocate and manage funds according to guidelines established in the University’s investment and financial risk management policies.

Asset allocation

• Short-term funds are invested in debt securities generally with a term to maturity of less than 12 months.
• Long-term funds are invested across both the debt and equity sectors.

Typically, long-term funds are invested:

• 70% in growth assets (i.e. real property, domestic and international shares and alternative assets)
• 30% in debt securities (i.e. short-term money market and fixed interest securities)

Fund management

Debt securities and University-owned real property are managed internally by Investment and Capital Management. Non-Debt securities (i.e. growth assets) are managed externally by sector specialist managers. These assets are held within the Growth Pool portfolio.

Fund utilisation

The University strives for endowment and bequest funds to be sustainable (i.e. to balance spending with investment returns so that the real value/purchasing power of the fund remains unchanged over time). As a result, endowments and bequests are subject to a “5% Spending Rule”, which allows them to spend 5% of the prior year’s market value on an annual basis. The 5% Spending Rule does not apply to Foundations, which are able to replenish capital through new contributions.

For more information on the Gift Policy please click here.

Investment and risk management policies

Governance

The University’s investment policy is determined by the Investment and Commercialisation Committee (ICC), a Committee of the University Senate. Investment performance is compared to industry benchmarks and reported on a monthly basis to the relevant Committees.

Policy summary

The ICC oversees the University’s investment framework for achieving its financial goals, including guidelines for asset allocation, external manager selection and risk management.

The core goals of the investment strategy are to achieve meaningful returns while ensuring that investment revenues are sufficient to meet spending allocations relating to the bequest and endowment portfolio and operational cash flow needs of the University. Key components of the risk management strategy include:

• All debt investments are managed in accordance with the Approved Limits for Debt Investments.
• Debt assets are generally held to maturity rather than traded.
• The University does not presently invest in derivatives.¹
• An Asset Consultant regularly reviews the management and asset composition of the externally-managed growth pool.

¹ but is looking at implementing a basic debt derivatives capability to assist it with managing the risk exposure of the internally managed debt portfolios.

Internal Loans Policy

Investment and Capital Management are responsible for administering Internal Loans, lending transactions in which funds are provided on a quasi-commercial basis to operating units within the overall University financial framework.

To view the Internal Loans Policy, click here.