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Asset Management Committee: September 12, 2012

The Asset Management Committee met on Sept. 12, 2012. Past Chairman Lee Borck presided. In addition to the regular performance monitoring reports reviewed in the Aug. 16, 2012 teleconference, the following are a few of the reports received and actions taken at the regular meeting:

 

  • Foundation counsel reviewed the legal fiduciary and oversight obligations of the foundation, as it resides within the AMC and board. Staff summarized the foundation assets within the purview of the AMC.
  • Received a report from staff on the asset allocation study being conducted by consultant Cambridge Associates. CA concluded from the enterprise analysis that the portfolio composition and polices need not be constrained due to university operational characteristics. The report is complimentary of the present governance structure, investment and distribution policies and the composition of the portfolio and its ability to attain intergenerational equity. Cautions were noted regarding liquidity within the portfolio and how that relates to the size of the allocation to private capital investments, which are used to enhance portfolio return. The study will be finalized and reported at the December meeting.
  • Staff presented an annual strategy and performance review of the four themed portfolio allocations and the underlying managers, giving as an example an in-depth presentation of the due diligence process on one manager being run by staff in the background and reported to the committee through the quarterly manager activity reports.
  • Received an update from staff on the implementation and performance to date of the AlphaSimplex Volatility Cap and Beta Trend strategies, which attempt to reduce potential portfolio drawdowns and enhance the risk adjusted return of the endowment portfolio.
  • Received a report from the trust management sub-committee as a result of its June 25 meeting; no actions were required.
  • The real estate subcommittee reported the results of its August 21 meeting; no actions were required.
  • Minor policy updates to the Endowment Pool Participation and Distribution Policy were presented by staff.
  • Endowment pool annualized returns for the periods ending 6/30/2012 were <1.65>%, 8.98%, 0.56% and 6.56% for the one-, three-, five- and 10-year periods respectively.

If you are interested in learning more about the status of the endowment and the policies and procedures utilized in managing all KSU Foundation assets, please click here: http://www.found.k-state.edu/financials/investments/