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KSU Foundation

Asset management committee: September 21, 2016

Chairman Stephen Lacy presided at the regularly scheduled meeting on September 21, 2016. The following actions were taken:

Chairman Lacy provided an overview of the materials provided to the Committee. Reports were provided to the Committee on the Current Endowment Pool portfolio positioning, December topical discussion topic preview (Private Capital), Annual Comprehensive Reserves report, and the FY16 manager fees analysis.

Meeting minutes for the August 18, 2016 Asset Management Committee meeting were then approved.

Staff then gave an overview of its Long/Short Equity exposure within the Endowment Pool. Topics included current and future allocations, the portfolio construction role played in the Endowment Pool, performance review, fee analysis, sourcing and diligence of prospective managers, ongoing diligence of existing managers, and examples of internal reporting. Staff then commented on how it plans to use Long/Short Equity going forward in regards to re-balancing.

Chairman Lacy then introduced a Board Retreat Action Plan including a five-year operating model for the Committee to review and consider.  He reviewed organizational priorities and highlighted the need to review the implications from any determined actions.  Chairman Lacy presented a summary from the February Board retreat and June AMC meeting which outlined issues to consider which include: expectation for lower investment returns, current distribution formula does not allow for smoothing when at cap, and competing priorities exist with the current size of the Endowment Fund.

Staff proceeded to review the current formula used for distributions to purpose and two alternative methodologies for the committee to consider.

Staff provided the Kansas State University Foundation’s operating budget and a multi-factor model using different returns, fees, and fundraising scenarios with results showing data for FY2016 and projections for FY2025.  Staff then presented potential new net revenue sources to review: an Investment Management Company; a Real Estate Strategy; discussion of University Advancement Fee tiering; undesignated gifts; or undiscovered sources. Discussion followed on the risks and objectives of the provided new revenue sources.