University of Wisconsin Foundation UWF Campus Partner Workshop August 14th, 2013 1 8/12/2013
University of Wisconsin Foundation Mission The University of Wisconsin Foundation engages those who care about the University, provides opportunities to enhance its teaching, research and outreach programs and guarantees ethical stewardship of the gifts received. 2 8/12/2013
UWF Investment Objective The Foundation s investment objective is to maximize long-term real returns commensurate with the stated risk tolerance and provide distributions for current spending needs. The Chief Investment Officer and Investment Staff are managing fiduciaries investing in accordance with the Foundation s Investment Policy Statement. 3 8/12/2013
UWF Investments Team Julie Van Cleave Chief Investment Officer Tom Olson Chief Investment Officer, Private Markets John Dobson Sr. Managing Director of Investments Dan Julie Senior Director of Investments Michele Bernius Investment Analyst Ana Maria Murphy Investment Analyst/Operations John Norton Investment Analyst David Golden Investment Analyst/Investor Relations Beth Bauer Office Coordinator 4 8/12/2013
UWF CIO & Investments Team Responsibilities Fiduciary responsibility for investing the Endowment & Expendables portfolios Recommends investment objectives, goals, risk assessments, investing vehicles, security types & position limits Work in conjunction with President/CEO to manage investment operations, resources and expenses 5 8/12/2013
UWF Investment Committee Members Richard Antoine Chair of the Board Thomas Falk Vice Chair of the Board Jill Hatton Chair of Investment Committee Jill Hatton Chair of Alternative Asset Subcommittee Stephen Petersen Chair of Traditional Asset Subcommittee Paul Collins Jeffrey Diermeier Phillip Gross Jon Hammes Steve Hawk Ted Kellner Paul Leff Peter Leidel Sheldon Lubar Thomas Madsen Philip Matthews John Nelson Albert Nicholas John Oros Ricky Sandler Michael Shannon Advisory Member Advisory Member Advisory Member Advisory Member 6
UWF Investment Committee Governance and oversight Sets investment policy and portfolio parameters Collaborates with Investments team to assess market conditions on a regular basis Partnership and networks Work in conjunction with President/CEO to assess investment performance 7 8/12/2013
Investment Policy Framework Long-term horizon due to the perpetual endowment model Process to assess optimal mix of investment assets across global opportunity set Expected rate of return and risk characteristics determined across asset classes Guideline ranges set for a mix of stocks, bonds and alternative assets 8 8/12/2013
Long-Term Return Assumptions Asset mix target return assumption of 6.10% nominal expected or the equivalent of a real return of 4.10% Long-term U.S. inflation assumption of 2.0 2.5% Additional approximate 1.0% of return expected to be generated by active management strategies; leading to an expected long-term return of 7.10% Expected long-term return reviewed at least annually 9 8/12/2013
Endowment Portfolio Asset Class Guidelines Broad Asset Class Policy Weight (%) Guideline Range (%) Equity Related 75 65 to 85 Fixed Income Related 25 15 to 35 Cash Equivalent 0 0 to 10 Total 100 10 8/12/2013
Specific Asset Class Guidelines Policy Asset Mix Policy Weight (%) Guideline Range (%) Global Public Equity 60.0 30 to 72.5 Private Equity 10.0 5 to 30 Real Estate 5.0 2.5 to 10 Global Fixed Income 25.0 20 to 30 Cash/Residual Holdings 0.0 0 to 10 Total 100.0 11 8/12/2013
UWF Policy Benchmark Effective January 1, 2011 Asset Class UWF Allocation Index Global Public Equity 60% MSCI ACWI Private Equity 10% Venture Economics (U.S. Private Equity ex-venture Capital) Real Estate 5% FTSE EPRA/NAREIT Developed Global Fixed Income 25% Barclays Capital Global Aggregate 12 8/12/2013
Endowment Portfolio Asset Allocation 70% as of June 30, 2013 60% 50% 54% 60% 40% 30% 22% 25% 20% 17% 10% 10% 3% 5% 3% 0% Global Public Equity Private Equity Real Estate Global Fixed Income Cash/Resid. Actual Targets 13 8/12/2013
Endowment Portfolio Performance Performance for periods ending 06/30/2013 1 Annualized 2nd Qtr YTD 1 Year ITD 2 3 Years 5 Years 10 Years UWF Endowment 0.80% 5.87% 12.64% 6.96% 10.07% 3.29% 7.48% Policy Benchmark -0.11% 3.92% 11.65% 6.14% 10.51% 4.58% 7.83% Net Relative Return 0.91% 1.95% 0.99% 0.82% -0.44% -1.29% -0.35% 1 Performance is reported net of internal and external investment management fees. 2 ITD -Inception to date reflects a change in the investment policy that was implemented on 01/01/2011. 14 8/12/2013
Assets Under Management as of June 30, 2013 Endowment $2,020,018,937 Expendables $621,720,350 Life Income $81,261,224 Total Fund $2,723,000,511 15 8/12/2013
Millions Historical Allocation as of June 30, 2013 $3,000 Historical Allocation $2,500 $2,000 $1,500 $1,000 $500 Endowment Expendables Life Income $0 Sep-01 Dec-02 Mar-04 Jun-05 Sep-06 Dec-07 Mar-09 Jun-10 Sep-11 Dec-12 16 8/12/2013
Contact Information David Golden UW Foundation Investment Analyst david.golden@supportuw.org (608) 263-0376 17 8/12/2013