Investment Policy University of Georgia Research Foundation, Inc. Adopted April 20, 2017

Transcription

1 Investment Plicy University f Gergia Research Fundatin, Inc. Adpted April 20, 2017 This Investment Plicy guides the University f Gergia Research Fundatin, Inc. (UGARF), its fficers, directrs, and staff, as well as its external financial services firms (EFSF), in effectively supervising and managing assets t fulfill UGARF s brad missin in supprt f scientific, literary, educatinal, and ther charitable prgrams. Mre specifically, UGARF s investment plicies shuld align with UGARF s primary missin t supprt the research enterprise at the University f Gergia. This Plicy shuld be peridically reviewed and, if apprpriate, revised t ensure it adequately reflects any changes in UGARF s missin r strategic pririties. This Plicy: A. Describes the investment bjectives and primary risk psture fr UGARF s assets; B. Identifies a spending rate; C. Establishes asset allcatins and investment guidelines; D. Specifies the criteria fr evaluating achievement f investment perfrmance bjectives; and E. Outlines expectatins and requirements f the Investment Cmmittee and thse EFSFs that manage UGARF s investments. A. Investment Objectives and Risk Psture. 1. Investment Objectives. UGARF s primary investment bjective is a ttal real return that preserves the purchasing pwer f UGARF s assets, while generating a predictable, stable stream f annual earnings, as required t meet spending needs t adequately supprt the research enterprise at the University f Gergia. The ttal investment return bjective is t exceed 4% plus the rate f inflatin. This apprach creates a balance between annual spending and the expected real return n assets. 2. Risk Psture. UGARF acknwledges the psitive crrelatin between risk and return and the lng term nature f its primary investments. UGARF takes a cnservative apprach t risk, and investment decisins shuld guard against: a. the inability t prvide necessary cash flw t supprt the fundatin missin; and b. endangerment f the perpetual nature f UGARF s assets. In making any decisin relative t the investment f UGARF s assets, each f the fllwing risk factrs must be cnsidered: a. general ecnmic cnditins; b. pssible effect f inflatin r deflatin; 1

2 c. the rle that each investment r curse f actin plays within its verall investment prtflis; d. expected ttal return frm the incme and appreciatin f investments; e. ther UGARF resurces; and f. requirements t make timely distributins and preserve capital. B. Spending Rate. The spending rate is established n an annual basis. Fr mre details, see UGARF s separate Budget Develpment and Spending Rate Prcedures, a cpy f which is included at Appendix A fr cnvenience. C. Asset Allcatins and Investment Guidelines. UGARF s assets may be invested in bth shrtterm and lng-term investment prtflis. 1. Asset Allcatin. UGARF s assets will be allcated amng the fllwing asset classes: a. Glbal Equity; b. Bnds/Cash; and c. Alternative Investments. (Asset allcatin and mix guidelines fr the Lng-Term Prtfli are prvided in Appendix B. UGARF anticipates that its asset allcatin targets may change peridically if needed t meet investment bjectives and spending plicy.) 2. Investment Guidelines. UGARF and its EFSF will fllw these guidelines in the investment management f UGARF s assets. a. Glbal Equity Prtfli. The Glbal Equity Prtfli may include investments in a number f sub-asset categries, including a Dmestic Equity prtfli, an Internatinal Equity prtfli, etc. Equity hldings in a single cmpany (including cmmn stck and cnvertible securities) shuld nt exceed 10% (at cst) f the individual manager s prtfli r 5% (at cst) f the Dmestic Equity prtfli. Equity hldings will be diversified as t manager style (i.e. value and grwth) acrss the varius equity sub-asset categries, cnsistent with UGARF s risk tlerance. UGARF and its EFSF will review the prtfli s asset mix at least quarterly and rebalance its mix at any time ne r mre asset classes reaches the minimum r maximum allcatin. In rebalancing, the primary fcus will be n verall equity expsure. UGARF will allcate assets back t the target mix ver a reasnable perid f time, paying attentin t the balance f manager style acrss the ttal equity prtfli. UGARF anticipates that its asset allcatin targets may change peridically if needed t: meet investment bjectives; prvide available spending per the established spending rate; r mitigate risk. A minimum f 20 individual stcks shuld be held within each f the Individual Equity prtflis. Marketable cmmn stcks, preferred stcks, preferred stcks cnvertible int 2

3 cmmn stcks, and bnd securities cnvertible int cmmn stcks are the nly permissible equity investments. b. Bnd Prtfli. The duratin f the fixed incme prtfli shuld be targeted t that f the Barclays Intermediate Gvernment/Credit Index and may vary +25%/-75% frm the target. Bnd hldings in a single issuer (excluding bligatins f the U.S. Gvernment, its agencies, and gvernment spnsred entities) shuld be limited t 5% f the manager s prtfli measured at market value at the time f purchase. Acceptable asset categries include mney market securities, U.S. Gvernments, its agencies and gvernment spnsred entities, mrtgage backed and asset-backed securities, and crprate securities. All securities may be purchased withut regard t the stated final maturity date r average life f the security. The duratin, as utlined abve, is the measure f the price sensitivity f the prtfli and the interest rate risk cntrl. A bnd prtfli shuld maintain an average credit rating f A r better by at least ne f the widely accepted credit rating agencies r rganizatins. Unrated securities f the U.S. Treasury, gvernment agencies, and gvernment-spnsred entities are permissible investments. Securities f freign (nn-u.s.) entities are limited t 20% f the ttal fixed incme prtfli, measured at market value. The manager may emply hedging techniques t avid unwanted currency translatin risks. Bnd purchases shuld be limited t readily marketable securities. Private placements are nt permissible investments. Cnvertible bnds r preferred securities are als nt permissible investments. Securities may be purchased n a when-issued r delayed-delivery basis. All extic derivative securities are prhibited. c. Alternative Investment Prtfli. Alternative strategies may be used t the extent they achieve investment bjectives, mitigate risk expsure, and enhance annual spending limits. Alternative investments prtflis may include the fllwing: Hedge Funds private investment pl cnstructed t take advantage f certain identifiable market pprtunities Real Assets physical r tangible assets that have intrinsic value such as real estate, il, precius metal, cmmdities, and agriculture land Private Equity equity capital f a seasned cmpany that is nt listed n a 3

4 public exchange Managed Futures strategy in which futures cntracts are utilized t gain expsure t price mvements in markets such as cmmdities, energy, agriculture, interest rates, stck indexes, and currency D. Investment Perfrmance Objectives. Specific investment perfrmance bjectives are imprtant t measure success and facilitate nging review and evaluatin f investment strategies. The perfrmance bjectives belw are designed t prvide a quantitative basis t judge the effectiveness f the Lng-Term Prtfli and the individual fund managers. 1. Annualized Return. In general, the expected r mdeled real return n the Lng-Term Investment Prtfli shuld meet r exceed 4%. Specifically, ver a 3- t 5-year perid, the ttal Lng-Term Investment Prtfli s annualized ttal return shuld: Exceed the annualized rate f inflatin (as measured by the Persnal Cnsumptin Expenditures (PCE) Price Index 1 ) by at least 4% (t be determined based n real return expectatin); Meet r exceed the annualized ttal return f the UGARF Custm Benchmark, which is cmprised f an apprpriate weighting f the fllwing benchmarks: Glbal Equity; Bnds; and Alternative Investments Specifically, the UGARF Custm Benchmark will be cmpsed f a weighted index cmprised f: 50% MSCI AC Wrld 25% Barclays Intermediate Gvernment/Crprate; and 25% 90-day T-bill + 4%. Frm inceptin at 12/01/2004 t 10/31/2007 the benchmark was: 35% S&P 500; 14% Russell Mid Cap; 7% Russell 2000; 14% MSCI EAFE; 30% Lehman Gv t/crp.; and 2.5% REIT/7.5% T-Bill+4%. 1 Persnal Cnsumptin Expenditures (PCE), r the PCE Index, measure price changes f cnsumer gds and services. Expenditures nted n the index include actual expenditures and expenditures that are attributed t husehlds in the United States. Sharing similarities with the Cnsumer Price Index (CPI), the PCE is part f the persnal incme reprt issued by the Bureau f Ecnmic Analysis f the Department f Cmmerce. The Fed, hwever, prefers the PCE index when reviewing ecnmic cnditins and charting a curse f actin that impacts inflatin and emplyment. 4

5 Frm 11/01/2007 t 08/31/2010 the benchmark was: 20% S&P 500; 6% Russell Mid Cap; 4% Russell 2000; 10% MSCI AC Wrld; 20% MSCI EAFE; 20% Lehman Gv t/crp.; and 20% T-Bill+4%. Frm 9/1/2010 t 9/30/2016 the benchmark was: 40% MSCI AC Wrld; 40% Barclays Capital Gv t/crp; and 20% T-Bill+4%. 2. Individual Fund Manager Retentin Guidelines. Each asset class r investment style emplyed has an Index Benchmark, which is used in the asset allcatin mdeling prcess. This prxy fr the asset class is measurable in tw dimensins, rate f return and risk. The selected indices are used t develp the verall risk/return prfile fr the investment prgram. Therefre, it is als apprpriate t use these indices as ne f the evaluatin tls fr bth hiring and retaining an individual fund manager. Cmparisn t an index gauges success relative t a brad market in which the manager invests; hwever, this measurement is insufficient in islatin. Cmparisn t a manager s peer universe prvides a useful cmpliment t the index cmparisn as it reveals a manager s relative rank t ther alternative manager candidates. The fllwing quantitative tests measure each fund manager s return and risk. Each test will be applied quarterly t determine if a new manager search prcess shuld be initiated by UGARF s EFSF. An existing manager s cmpsite return fails t exceed the apprpriate index benchmark fr 3 successive rlling 3-year perids, advancing 1 quarter at a time. An existing manager s cmpsite return versus their apprpriate universe cmparisn fails t achieve tp 1/2 perfrmance fr 3 successive rlling 5-year perids, advancing 1 quarter at a time. An existing manager s risk (as measured by the standard deviatin f the manager s cmpsite return) shall nt exceed 150% f the standard deviatin f the apprpriate index benchmark ver a 3-year and 5-year trailing basis. An existing manager s risk versus return (as measured by the Sharpe rati f the manager s cmpsite return) shall exceed the Sharpe rati f the manager s apprpriate index benchmark ver a 3-year and 5-year trailing basis. Fr each f the abve requirements, individual fund manager cmpsites will be utilized accessing the lngest applicable histrical infrmatin available, regardless f the manager s tenure with UGARF. The subject manager will be treated as a candidate in the search prcess. 5

6 Additinal measures will als be emplyed in the evaluatin prcess, as determined by UGARF s EFSF, including but nt limited t vilatin f plicy guidelines, staff turnver, change in firm wnership, and style drift. E. Expectatins and Requirements f the Investment Cmmittee. The investment cmmittee will perate accrding t the separate charter apprved by the bard f directrs, which is attached here as Appendix C fr cnvenience. The Investment Cmmittee als has respnsibilities as set frth in Sectin I f the University f Gergia Research Fundatin, Inc. Plicy n Equity Acquisitin in Licensing, attached t this Plicy fr cnvenience as Appendix D. F. Expectatins and Requirements f EFSFs. EFSF are expected t meet with UGARF representatives peridically t review investment alignment with bjectives, structure f the prtflis, and past results. Specifically, EFSF shuld assist UGARF with the fllwing: Develping/refining an investment plicy r statement. EFSF will guide the bard in determining and dcumenting investment bjectives, perfrmance benchmarks, and guidelines fr the investment managers. Frmulating asset allcatin plicy and rebalancing prvisins. EFSF will assist UGARF in determining its risk tlerance and then the apprpriate asset classes, at what percent f the ttal (target levels), t be included in the fund structure. Managing t the spend rate. EFSF will manage the asset allcatin plicy t align return expectatins and the UGARF spending rate. Evaluating and selecting the investment manager. EFSF will help develp criteria fr manager selectin within the framewrk f the Plicy. Hwever, it shall be the duty f the EFSF t cntinuusly research, evaluate, and recmmend additinal investment ptins that may be prudent fr the UGARF prtflis even if the investment ptin is nt currently permitted by the Plicy. If such recmmendatin is made, the investment cmmittee, if in favr f the recmmendatin, wuld present such t the bard and it wuld have the authrity t accept r reject the recmmendatin. The investment cmmittee wuld then submit in writing t the EFSF the apprval f the recmmendatin by the bard. Evaluating and reprting investment perfrmance. EFSF will assist with perfrmance reprting. Histrical and nging perfrmance reprting shuld be custmized t meet the cmmittee's infrmatin needs. EFSFs will prvide mnthly custdy statements that include: The prtfli cmpsitin (i.e. asset mix at market value) fr each majr class f security, including cash equivalents. Psitin, by individually named securities and/r by apprpriately described units f cllective funds, shwing market values f individually invested securities. All transactins in descriptive detail. 6

7 APPENDIX A University f Gergia Research Fundatin, Inc. Budget Develpment and Spending Rate Prcedures Backgrund: In 2013, the UGARF bard f directrs agreed t maintain $26 millin in UGARF s lng-term investment prtfli, which in practice wuld perate like an endwment. An annual spending limit, estimated t be apprximately $1.04 millin in the initial years, was calculated n $26 millin and became a revenue surce t UGARF fr annual budget purpses. The gal f this apprach was t allw cntinued lngterm investment grwth and an increased spending limit ver time. This was the preferred apprach t a previusly cntemplated expenditure f all but rughly $11.5 millin f UGARF s lng-term investment prtfli. Prcedure: The Executive Vice President has authrity with respect t, the cnduct f the business and affairs f the crpratin, and therefre is respnsible fr budget develpment and spending. Each January, the Executive Vice President will begin the budget develpment prcess fr the next fiscal year. The prpsed budget may include spending frm the lng-term investment prtfli. Hwever, absent unique spending needs, and/r pr investment returns, the Executive Vice President shuld adhere t the fllwing principles: Spending frm the lng-term investment prtfli in any given fiscal year shuld nt: Exceed 4% f the average market value f the lng-term prtfli ver the 12 quarters f the three (3) previus calendar years; r Reduce the market value f the lng-term prtfli belw $26 millin. The Executive Vice President will cmmunicate with, and slicit input frm, the Financial Vice President and Treasurer regarding budget develpment, specifically identifying any prpsed annual spending rate. This will allw the Financial Vice President and Treasurer, the Investment Cmmittee, and any external financial services firms t prvide their recmmendatins with respect t annual spending frm the lng-term prtfli, as well as plan investment strategies that address the prpsed spending. Ordinarily, at each spring meeting f the UGARF bard f directrs, the Executive Vice President will present the final prpsed budget fr the next fiscal year t the UGARF bard f directrs fr apprval. 7

8 APPENDIX B Asset Allcatin Requirements Lng-Term Investment Prtfli Investment Prtfli Target Range Glbal Stcks (dmestic & internatinal) 50% 30-70% Alternative Investments: 25% 0-40% Bnds: *** 25% 20-70% *** Cash and Cash Equivalents are cnsidered "Bnds" fr purpses f Asset Allcatin 8

9 APPENDIX C UNIVERSITY OF GEORGIA RESEARCH FOUNDATION, INC. CHARTER OF THE INVESTMENT COMMITTEE The Investment Cmmittee (the Cmmittee ) was prperly established by the authrity f the Bard f Directrs f the University f Gergia Research Fundatin, Inc. ( UGARF ) n March 24, The purpse f this Charter is t define the precise functins f the Cmmittee and its respnsibilities and authrity. Only the Bard f Directrs may t mdify this Charter. I. Purpse The Cmmittee was established t assist the Bard f Directrs in fulfilling its fiduciary investment respnsibilities. The Cmmittee is respnsible fr versight f the general management f UGARF s investments and preservatin f UGARF s resurces, including its shrt-term and lng-term investment prtflis and endwment, if any, in perpetuity. II. Membership; Chair There will be at least fur members f the Cmmittee, appinted by the President, wh each will serve a term f at least ne year. The President shall appint the chair f the Cmmittee, and, as f the effective date f this Charter, has appinted UGARF s Financial Vice President and Treasurer t chair the Cmmittee. III. Respnsibilities; Authrity between Meetings The Cmmittee shall: 1. Determine investment gals and bjectives based n the Bard s tlerance fr risk, and make recmmendatin t the Bard regarding any investment plicy mdificatins the Cmmittee determines apprpriate. 2. Interview external financial services firms and make recmmendatin t the Bard regarding thse firms the Cmmittee determines shuld be retained by UGARF, as well as recmmend actin t the Bard t replace any external financial services firms that d nt cmply with duties and respnsibilities as utlined in UGARF s investment plicies. 3. Evaluate and benchmark current external financial services firms at least nce every five years against ther prviders t identify and cnsider the best pssible investment advice and management related t UGARF s assets, and reprt its findings and recmmendatins t the Bard. 4. Meet with UGARF s external financial services firms at least twice per year t receive perfrmance reprts and mnitr perfrmance relative t bjectives set frth in UGARF s investment plicies, and by cmparisn t stated benchmarks and ther apprpriate indices. 9

10 5. Review peridically actual asset allcatin against the minimum and maximum allcatin parameters required by UGARF s investment plicies, and evaluate asset allcatin, fund manager, and ther investment recmmendatins prpsed by UGARF s external financial cnsultants. Between meetings f the Bard, the UGARF Financial Vice President and Treasurer shall have the authrity t direct an external financial services firm hired by UGARF t make changes t asset allcatins r fund managers, r t implement ther investment recmmendatins, s lng as such changes are within the parameters utlined in UGARF s investment plicies and nly after recmmendatin frm the Investment Cmmittee t d s. If the UGARF Financial Vice President and Treasurer directs a UGARF external financial services firm t take any such actin, s/he shall reprt such actin t the Investment Cmmittee at its next meeting and t the UGARF Bard at its next meeting. In their discretin, either the UGARF Financial Vice President and Treasurer r the Cmmittee may bring any recmmendatin t the UGARF Executive Cmmittee, r the full Bard, fr cnsideratin and apprval. 6. Define and recmmend t the Bard prcedures fr cntrlling and accunting fr investment expenses by examining mney manager fees, mutual fund expenses, trading csts, sft dllar csts, custdial charges, and cnsulting and administrative csts and fees, and any ther expenses related t investment management. 7. Avid prhibited transactins and manage r avid ptential cnflicts f interest. 8. Reprt its activities and recmmendatins t the Bard at each meeting f the full Bard. IV. Meetings The Cmmittee will meet as ften as it deems necessary r apprpriate in rder t fulfill its respnsibilities under this Charter, either in persn r thrugh electrnic means, and at such times and places as the Cmmittee determines. Minutes f these meetings shuld be prvided t the UGARF Secretary. V. Resurces The Cmmittee has the authrity t cnduct any investigatin it determines apprpriate t fulfill its respnsibilities, and has direct access t UGARF s independent auditrs as well as any Bard member r staff persn wh supprts UGARF. The Cmmittee may recmmend t the Financial Vice President and Treasurer, r t the Executive Cmmittee r full Bard, that UGARF retain, at UGARF s expense, special legal, investment, r ther cnsultants r experts it deems necessary in the perfrmance f its respnsibilities. 10

11 APPENDIX D University f Gergia Research Fundatin, Inc. Plicy n Equity Acquisitin in Licensing I. Intrductin Thrugh the wrk f the Technlgy Cmmercializatin Office ( TCO ), the University f Gergia Research Fundatin, Inc. ( UGARF ) ccasinally has the pprtunity t acquire equity in cmpanies as cnsideratin fr a license agreement. Yung cmpanies in particular ften d nt have the requisite cash reserves t cmpete with an established cmpany fr rights t intellectual prperty wned by UGARF. An ffering f equity is a means f enabling therwise qualified small cmpanies t license intellectual prperty frm UGARF. Hwever, UGARF s acceptance f equity raises tw cncerns: risk and cnflicts f interest and cnflicts f cmmitment. Risk is an issue because, at the time UGARF wuld receive equity in a yung cmpany, the equity wuld generally have n value. Whether r nt the equity will acquire value will depend upn the verall success f the cmpany, which is a functin f many factrs that may nt relate t the licensed intellectual prperty. Therefre, in rder t minimize risk, UGARF will require sme cash as part f the cnsideratin fr the license agreement, except fr in the case f exceptinal circumstances as apprved by the Directr f TCO, the UGARF Investment Cmmittee, and the Executive Vice President f UGARF. Cnflicts f interest and cnflicts f cmmitment may arise when the inventrs, authrs, r creatrs f the intellectual prperty are als wners r equity hlders in the licensee cmpany. Owners r equity hlders stand t gain if the cmpany des well and therefre may have incentive t take actins and make decisins that favr the interests f the cmpany ver their respnsibilities t UGARF and the University f Gergia. This Plicy reduces the ptential fr real r perceived cnflicts by remving inventrs, authrs, and creatrs f UGARF intellectual prperty, as well as departments, schls, and units f the University f Gergia, frm decisins regarding the acceptance, management, and sale f equity. Equity is wned by UGARF and all decisins regarding the stck are made in the sle judgment f UGARF in accrdance with this Plicy. II. Plicy In the curse f intellectual prperty licensing, UGARF, thrugh the wrk f TCO, may have the pprtunity t acquire equity in a licensee cmpany. This Plicy enables UGARF t receive a benefit frm acquiring equity while addressing risk management and cnflicts f interest. A. UGARF may accept equity in a cmpany as partial cnsideratin fr licensing transactins related t UGARF intellectual prperty in apprpriate circumstances pursuant t this Plicy. TCO is given the authrity t negtiate these transactins and the Executive Vice President f UGARF rdinarily will execute any final licensing arrangements n behalf f UGARF. Under exceptinal circumstances apprved by the Directr f TCO, the UGARF Investment Cmmittee, and the Executive Vice President f UGARF, it may be apprpriate fr UGARF t accept equity as full cnsideratin fr such a transactin. 11

12 B. UGARF s acceptance f equity in cnsideratin f licensing UGARF intellectual prperty shall be based upn the principles f fairness in decisin-making and preeminence f the missins f UGARF ver financial r individual persnal gain. C. UGARF shall neither seek nr accept representatin n the bard f directrs f a licensee cmpany in which UGARF hlds equity, nr exercise any vting rights n bard actins f the licensee cmpany, regardless f the level f UGARF s equity interest. Exceptins t this prvisin require apprval f the Directr f TCO, the UGARF Investment Cmmittee, and the Executive Vice President f UGARF. D. The terms f any licensing transactin, ther than thse related t UGARF s acceptance f equity in a licensee cmpany, shall be cnsistent with ther transactins fr cmparable intellectual prperty t which UGARF is a party. E. UGARF generally shall nt accept mre than a fifteen (15%) wnership share in a licensee cmpany. Exceptins t this prvisin require the apprval f the Directr f TCO, the UGARF Investment Cmmittee, and the Executive Vice President f UGARF. F. Where there is a prpsal fr UGARF t accept equity in a licensee cmpany as cnsideratin fr a transactin t license UGARF intellectual prperty, UGARF, thrugh TCO, taking int accunt any legal restrictins, shall either: a. arrange fr the inventrs, authrs, r creatrs f the licensed intellectual prperty t receive his r her share f equity directly frm the licensee cmpany upn executin f the relevant agreement, including prvisins relating t restrictins, if any, n the transfer r dispsitin f the share f equity acquired by such inventrs, authrs, r creatrs; r b. take all equity, including the shares f any inventrs, authrs, r creatrs, in the name f UGARF, in which case UGARF will make decisins regarding equity dispsitin in its sle discretin and based upn its sund business judgment in accrdance with this Plicy. The sle right f any such inventrs, authrs, r creatrs under these circumstances is the receipt f the apprpriate prprtinal share, as indicated in Sectin H, belw, f such equity r its cash equivalent at such time and in such frm as required by the University f Gergia Intellectual Prperty Plicy and as UGARF deems apprpriate. G. Under n circumstances shall UGARF make any direct investment in any licensee cmpany in which UGARF then hlds equity unless and until UGARF s interest in the licensing transactin ends r UGARF has dispsed f its equity interest. If the Directr f TCO recmmends t the Executive Vice President f UGARF that UGARF shuld vte n an issue presented t UGARF as an equity hlder in a licensee cmpany, then the Executive Vice President f UGARF has the authrity t effectuate UGARF s vte n that issue, taking int cnsideratin the recmmendatin f the Directr f TCO and after btaining the apprval f the Treasurer f UGARF. H. UGARF shall determine and distribute the shares r cash prceeds, upn cnversin f equity t cash, t be distributed t any inventrs, authrs, r creatrs accrding t the 12

13 memranda f understanding between UGARF and the Bard f Regents f the University System f Gergia and the University f Gergia Intellectual Prperty Plicy, taking int accunt the distributins, if any, already made t inventrs, authrs, r creatrs pursuant t Sectin F, abve, and deducting fr expenses incurred by UGARF by reasn f its wnership r administratin f the intellectual prperty. I. UGARF may dispse f equity acquired pursuant t this Plicy as determined by the Treasurer f UGARF, based n recmmendatin f the UGARF Investment Cmmittee and UGARF s external investment cnsultant and taking int cnsideratin stipulatins r requirements resulting frm any Initial Public Offering by the licensee cmpany. J. There shall be n negtiatin independent f UGARF by any inventr, authr, r creatr regarding any license with a licensee cmpany. Exceptins t this prvisin may be apprved under exceptinal circumstances by the Directr f TCO, the UGARF Investment Cmmittee, and the Executive Vice President f UGARF. K. This plicy is effective April 1,