One way of giving to the University is through an endowment. An expendable endowment will allow the University to spend both the capital and the investment income to support the University.
Alternatively, a permanent endowment is where the capital is retained and the investment income is used to fund scholarships, academic posts or some other aspect of University life.
All permanent endowments and expendable endowments which will be spent over a long period are held in an Endowment Investment Pool which is managed by the University.
The supervision of investments is delegated to the Finance Committee by Council. Finance Committee is required to:
- To determine the allocation of funds for investment, indicating the liquidity requirements attached to the funds.
- To determine the strategic orientation, risk profile and allocation policy of funds under its management.
- To appoint fund manager(s) and receive reports on the performance of investments under their management.
Finance Committee achieves this by receiving advice and recommendations from an Investment Sub Committee (ISC) consisting of external lay members and members of the Finance Committee including the Treasurer and the Vice Chancellor.
Investment policy and objective
The ISC recognises the importance of the long term preservation of capital in respect of permanent endowments and the relationship between the risk, return and period of any investment. The ISC's view is that whilst income should not be overlooked the growth in value of the investment is the priority and this can be achieved by capital growth as well as income.
- The objective is to achieve and annual return of RPI +4%.
- No one holding should account for more than 5% of the total portfolio.
- Direct investment in derivatives is not permitted.
- Investment in tobacco and fossil fule companies is not permitted.
The ISC have appointed Investec Wealth & Investment to manage the Endowment Investment and have agreed an asset allocation designed to meet the investment objective with an acceptable level of risk.
The ISC monitors performance against the investment objective and relevant benchmark indices. Investec are required to report quarterly and meet with the Investment Group on a regular basis.
The portfolio asset allocation will fall within the ranges described in the table below:
|Asset Class||Ranges||Benchmark||Comparative Indices|
|Fixed Interest||0 - 10||5||FTSE Govt. All Stock Index|
|UK Equities||40 - 60||50||FTSE All Share Index|
|Overseas Equities||25 - 40||35||FTSE World (ex-UK) Index £|
|Property||5 - 15||10||IPD Index|
|Cash||0 - 20||0|
|Total||100||Bespoke composite benchmark|