Investment Policy Statement Template

[Pages:25]Investment Policy Statement

For

CSULA Foundation Endowment Fund

Amended and Restated June 25, 2015

CSULA Foundation Endowment Fund ? Investment Policy Statement

Table of Contents

EXECUTIVE SUMMARY .....................................................................................4 MISSION OF FOUNDATION ...............................................................................6 SCOPE OF THIS INVESTMENT POLICY ........................................................7 PURPOSE OF THIS INVESTMENT POLICY STATEMENT.........................7 DELEGATION OF AUTHORITY ........................................................................7 DEFINITIONS .........................................................................................................8 ASSIGNMENT OF RESPONSIBILITY ...............................................................9 GENERAL INVESTMENT PRINCIPLES ........................................................12 INVESTMENT MANAGEMENT POLICY..........................................13 GOAL OF FOUNDATION ...................................................................................13 ATTITUDE TOWARD GIFTS ............................................................................14 SPENDING POLICY ............................................................................................13 LOAN PROVISIONS ............................................................................................14 INVESTMENT OBJECTIVES ............................................................................15 INVESTMENT PHILOSOPHY ...........................................................................15 SPECIFIC INVESTMENT GOALS...................................................16 INVESTMENT MANAGER GOALS.................................................16 DEFINITION OF RISK ........................................................................................17 RISK TOLERANCE......................................................................17 LIQUIDITY ............................................................................................................17 MARKETABILITY OF ASSETS......................................................18 INVESTMENT GUIDELINES ............................................................................18

ALLOWABLE ASSETS ................................................................................................................ 18

DERIVATIVE INVESTMENTS...................................................................................................... 19

PROHIBITED ASSETS AND TRANSACTIONS ............................................................................... 19

SOCIALLY RESPONSIBLE GUIDELINES ...................................................................................... 19

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CSULA Foundation Endowment Fund ? Investment Policy Statement ASSET ALLOCATION GUIDELINES............................................................................................ 20 GUIDELINES FOR EQUITY INVESTMENTS ............................................................................... 21 GUIDELINES FOR FIXED INCOME INVESTMENTS AND CASH EQUIVALENTS .......................... 21 GUIDELINES FOR NON-TRADITIONAL/ALTERNATIVE INVESTMENTS ..................................... 22

SELECTION OF INVESTMENT MANAGERS ...............................................24 PERFORMANCE REVIEW AND EVALUATION ..........................................25 INVESTMENT POLICY REVIEW ....................................................................24

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CSULA Foundation Endowment Fund ? Investment Policy Statement

EXECUTIVE SUMMARY

Type of Plan

Current Assets:

Time Horizon:

Expected Return:

Risk Tolerance:

Spending Policy:

Asset Allocation:

Domestic Equities Large Cap Equities Growth Style Value Style Mid Cap Equities Growth Style Value Style Small Cap Equities Growth Style Value Style

International Equities Developed Equities Emerging Equities

Alternatives Commodities Real Estate Investment Trusts (REITs) Global Tactical Allocation Funds Treasury Inflation Protected Sec (TIPs)

Fixed Income U.S. Core Fixed Income Short-Term Fixed Income High Yield Fixed Income International Fixed Income

Endowment Fund

$30,120,997 as of April 30, 2015

Into perpetuity Evaluation ? 5 Years

7.46%

Moderate

3 to 5% of Trailing 3 Years Average Market Value

Lower Limit 25.5% 11.0%

5.5% 5.5%

4.0%

2% 2%

2.0%

1% 1%

12.0% 5.5% 2.5% 15.0% 2.0% 2.0% 5.0% 1.0% 15.0% 5.0% 7.5% 1.5% 0.8%

Preferred Allocation

34.0% 22.0%

11% 11%

8.0%

4.0% 4.0%

4.0%

2.0% 2.0%

16.0% 11.0% 5.0% 20.0% 4.0% 4.0% 10.0% 2.0% 30.0% 10.5% 15% 3.0% 1.5%

Upper Limit 42.5% 33.0%

16.5% 16.5%

12.0%

6% 6%

6.0%

3% 3%

20.0% 16.5% 7.5% 25.0% 6.0% 6.0% 15.0% 3.0% 45.0% 16.0% 22.5% 4.5% 2.3%

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CSULA Foundation Endowment Fund ? Investment Policy Statement

Evaluation Benchmark:

Total return to meet or exceed the performance of a policy index based upon the strategic asset allocation of the Fund to various broad asset classes. Specifically, the policy index will be a weighted index comprised of:

11% Russell 1000 Growth 11% Russell 1000 Value 04% Russell Mid Cap Growth 04% Russell Mid Cap Value 02% Russell 2000 Small Cap Growth 02% Russell 2000 Small Cap Value 11% MS EAFE Index 05% MS Emerging Mkts Index 04% Dow Jones UBS Commodity Index 04% FTSE NAREIT Index 02% Barclays Capital US Tips Index 10% Lipper Global Flex Index 10.5% Barclays Capital Aggregate Bond Index 15% Barclays Gov/Cr 1-5 Yr 03% Barclays Corporate High Yield 1.5% Citi World-Government Bond (UnHedged)

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CSULA Foundation Endowment Fund ? Investment Policy Statement

Statement of Investment Policy, Objectives, and Guidelines CSULA Foundation Endowment Fund

MISSION OF FOUNDATION

The mission of the CSULA Foundation Endowment Fund is to: Provide a structure for donors to support the future of CSULA. Provide long-term support for the mission of California State University Los Angeles (CSULA).

The Foundation is a nonprofit public benefit corporation and is not organized for the private gain of any person. It is organized under the California Nonprofit Public Benefit Corporation Law (NPBC Law) for public and charitable purposes to:

(a) Foster, encourage and promote the scientific, educational and charitable purposes of CSULA by constructing, establishing, maintaining, operating, conducting and giving to CSULA scientific, literary, educational and charitable buildings, equipment and facilities or doing or causing to be done one or more of such things and all other things incidental thereto;

(b) Promote a greater and better understanding in the community of CSULA's proper role and its policies and as it relates to its development needs;

(c) Provide financial assistance by allocations, gifts, loans and other means to CSULA, its support groups, undergraduate and graduate students, faculty and staff;

(d) Do any other act or thing and engage in and carry on any other activity in any manner connected with or incidental to, or calculated to promote, assist aid, or accomplish any of the aforesaid purposes;

(e) Provide management of all investment funds (short and long term).

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CSULA Foundation Endowment Fund ? Investment Policy Statement

SCOPE OF THIS INVESTMENT POLICY

This statement of investment policy reflects the investment policy, objectives, and constraints of the CSULA Foundation Endowment Fund separate from the unendowed funds of the CSULA Foundation.

PURPOSE OF THIS INVESTMENT POLICY STATEMENT

This statement of investment policy is set forth by the CSULA Board of Trustees and the Investment and Finance Committee of the CSULA Foundation Endowment Fund in order to:

1. Define and assign the responsibilities of all involved parties.

2. Establish a clear understanding for all involved parties of the investment goals and objectives of Fund assets.

3. Offer guidance and limitations to all Investment Managers regarding the investment of Fund assets.

4. Establish a basis for evaluating investment results.

5. Manage Fund assets according to prudent standards as established in common trust law.

6. Establish the relevant investment horizon for which the Fund assets will be managed.

In general, the purpose of this statement is to outline a philosophy and attitude, which will guide the investment management of the assets toward the desired results. It is intended to be sufficiently specific to be meaningful, yet flexible enough to be practical.

DELEGATION OF AUTHORITY

The Investment and Finance Committee and the Board of Trustees of the CSULA Foundation Endowment Fund are fiduciaries and are responsible for directing and monitoring the investment management of Fund assets.

Background: Throughout the RFP (Request For Proposal) in 2013, the Board of Trustees and the Investment and Finance Committee evaluated the non-discretionary model, the fully discretionary model (Outsourced CIO) and the partial discretionary model (Hybrid) for the management of Fund assets.

Results: The Fund will be managed in accordance with the hybrid partial discretionary model. The Investment Management Consultant will have partial discretion over the management of the Fund, but the Investment and Finance Committee will not relinquish full control. The specific responsibilities and areas of discretion will be outlined below in the Assignment of Responsibility section of this statement. 7

CSULA Foundation Endowment Fund ? Investment Policy Statement

The Investment and Finance Committee is authorized (with Board of Trustees approval) to delegate certain responsibilities to professional experts in various fields. These could include, but are not limited to:

1. Investment Management Consultant. The consultant may assist the Investment and Finance Committee in: establishing investment policy, objectives, and guidelines; selecting investment managers; reviewing such managers over time; measuring and evaluating investment performance; and other tasks as deemed appropriate.

2. Investment Manager. The investment manager has discretion to purchase, sell, or hold the specific securities that will be used to meet the Fund's investment objectives.

3. Custodian. The custodian will physically (or through agreement with a sub-custodian) maintain possession of securities owned by the Fund, collect dividend and interest payments, redeem maturing securities, and effect receipt and delivery following purchases and sales. The custodian may also perform regular accounting of all assets owned, purchased, or sold, as well as movement of assets into and out of the Fund accounts.

4. Additional specialists such as attorneys, auditors, actuaries, CPA's, and others may be employed by the Investment and Finance Committee to assist in meeting its responsibilities and obligations to administer Fund assets prudently.

5. Co-Trustee. The Investment and Finance Committee may appoint an outside individual or entity, such as a bank trust department, to be co-trustee. The Co-trustee will assume fiduciary responsibility for the administration of Fund assets.

The Investment and Finance Committee will not reserve any control over investment decisions of individual securities. Investment managers will be held responsible and accountable to achieve the objectives herein stated.

All expenses for such experts must be customary and reasonable, and will be borne by the Fund as deemed appropriate and necessary.

DEFINITIONS

1. "Fund" shall mean the CSULA Foundation Endowment Fund.

2. "Endowment Account" shall mean the individual permanently restricted account with the CSULA Foundation.

3. "Investment and Finance Committee" shall refer to the governing body established by the Board of Trustees to administer the Fund as specified by applicable by-laws.

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