UT Foundation Investments Questions and Answers
Are other universities facing this problem?
Investment and endowment losses are a nationwide problem, currently experienced by nearly all higher education institutions, as well as most not-for-profit organizations.
Who oversees Foundation investments?
Members of the Foundation’s investment committee have extensive financial and investment backgrounds.The committee retains a professional investment advisor and employs a master custodian to hold assets and report holdings.
How are Foundation funds invested?
The asset allocation combines diversified domestic and international equities, fixed income, alternative investments and cash. Investment managers manage asset classes geared toward their strengths, with an allocation of approximately 65% equities, 15% alternative investments and 20% fixed income.
Why hasn’t the Foundation changed investments during the current market?
Funds are invested for the long term, more heavily in equities. Time has shown this results in the greatest total return. Long-term growth outweighs short-term fluctuations.
What is the Foundation’s administrative fee? Why is this necessary?
The fee is 1.25% of the endowment’s three-year average market value. This funds the Foundation’s entire operations and a fund-raising grant for the Office of Institutional Advancement. Services include: managing over 2,000 endowed and non-endowed funds; receipting and acknowledging gifts; reporting fund activity; maintaining data bases; assisting in fund-raising efforts.
What is the Foundation’s spending policy?
Spending is limited to 4.9% of the endowment’s three-year average market value. The policy is reviewed yearly, and will be reduced to 4.5% for fiscal year 2010.
