Repository: UIHistories Project: Board of Trustees Minutes - 1992 [PAGE 28]

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16

B O A R D OF T R U S T E E S

[July 9

Revision to Investment Policy for University Endowment Funds and Authorization for Foreign Equity Manager

(16) On September 12, 1991, the Board of Trustees received a report on a review of the University of Illinois endowment pool investment program performed by Ennis, Knupp 8c Associates, Inc. The report outlined several recommendations for clarifying and enhancing the endowment pool investment program of the University. One of the recommendations was to increase the diversification of the investment program by allocating 10 percent or approximately $5 million of the portfolio to foreign equities. In February 1992, Ennis, Knupp & Associates, Inc., was engaged to perform a manager search in order to select the best investment manager for this role. The search process evaluated a diverse group of investment managers and recommended three managers that, in the consultant's opinion, best met the selection criteria and needs of the University. These three firms were interviewed by University financial personnel and further evaluated in order to produce a single recommendation. The recommended investment manager is Scudder, Stevens, and Clark of New York. The firm is an experienced manager of foreign equities and has an excellent performance record. The fees charged by the firm are competitive1 and include both investment management and custody services. The vice president for business and finance recommends: 1. Adoption of the Statement of Investment Policy for the University of Illinois endowment; and, 2. Approval for establishment of an investment account with Scudder, Stevens, and Clark for the purposes described and adoption of the following resolution. I concur.

Statement of Investment Policy for the University of Illinois Endowment Pool (July 9, 1992)

The purpose of this Statement is to establish the investment policy for the University of Illinois endowment pool. Definition of Responsibilities The Board of Trustees is responsible for establishing the investment policy (described below) that is to guide the investment of the pooled endowment portfolio. The investment policy recognizes the long term nature of endowment funds and seeks to balance present and future support. The endowment pool investments are distributed to a number of asset classes to minimize investment risk through diversification and simultaneously provide enhanced investment performance. Investment managers appointed by the Board of Trustees to execute the policy will invest the endowment assets in accordance with established guidelines, but will apply their own judgements concerning relative investment values. In particular, the investment managers are accorded full discretion, within established guidelines and policy limits, to select individual investments and diversify their portfolios. Allocation of Assets The table below illustrates the target asset allocation deemed appropriate for the endowment portfolio by the Board of Trustees:

1

The annual fee is .95 percent of the market value of the portfolio.