Policies and Procedures
Policy 401 – General Guidelines for Investing Funds on Deposit
July 1, 1996
January 19, 2010
Funds on deposit at the University generate investment returns that provide support for numerous University programs. The University has developed the following guidelines for investing funds.
The University of North Carolina Board of Trustees has delegated authority by the University of North Carolina Board of Governors to preserve, maintain, and manage all properties, both real and personal, funds and other things of value. To generate the best possible return while protecting the real purchasing power of its financial assets, the University carefully considers calculated financial risks through authorized investment strategies.
Investments of various funds may be pooled unless prohibited by statute or terms of the gift or contract. The University uses investment pools to diversify its holdings among asset classes and managers, directing each towards specified investment goals of short-term, intermediate, and long-term, that best serve the University.
Within the guidelines and restrictions established for each fund, custodians of University funds are responsible for determining how best to allocate their resources to achieve specified investment goals.
The University has established and maintains investment pools to guide investment efforts. The following entities are the current authorized investment pools used to manage and administer University funds.
1. The UNC-CH Short-Term Investments (commonly known as Money Market)
This is a short-term investment fund, for investment of expendable monies, comprised of the University's Temporary Pool and State Treasurer's Short-Term Investment Fund (STIF). Participation in either the Temporary Pool or STIF is dependent upon the account's classification. Both funds invest in U.S. Government securities, mutual funds, money market funds and other highly liquid short to intermediate term notes and bonds. Income distribution is determined each quarter by multiplying the distribution rate by the average of the invested fund balance.
This was established in October 2007 and is comprised of fixed income investments and investments with the Investment Fund. Participation in the Intermediate Investment Pool is open to all participants that are eligible for the University’s Temporary Pool and requires a minimum investment to participate in the pool. Fund ownership of the University’s Intermediate Investment Pool is measured using the unit value method. Under this method, each participant’s investment balance is determined on a market value basis.
3. The UNC-CH Foundation Investment Fund, Inc. (commonly known as the "Investment Fund")
This is a North Carolina non-profit corporation exempt from income tax pursuant to Section 501(c)(3). The Investment Fund was established in 1977 and is classified as a governmental external investment pool. The pool is utilized to manage the investments for charitable, non-profit, foundation, associations, trust, endowment, and funds organized and operated primarily to support the University. The Investment Fund has a long-term horizon and is intended to be utilized solely for the investment of endowment funds, funds internally designated as endowments (quasi-endowments) and other eligible funds.
The Investment Fund is the primary participant of the UNC Investment Fund, LLC and receives a monthly unitization report from the UNC Management Company which defines change in book and market value, applicable realized gains and losses and expenses. Fund ownership of the University’s Investment Fund is measured using the unit value method. Under this method, each participant’s investment balance is determined on a market value basis.
4. The UNC Investment Fund, LLC (commonly known as the "System Fund")
This is a limited liability company organized under the laws of the State of North Carolina. The System Fund was established in 2002 by the Investment Fund and is classified as a governmental external investment pool. The pool is used to manage the investments for the University of North Carolina, its constituent institutions, and affiliates of the constituent institutions. This includes charitable, non-profit foundations, associations, trusts, endowments, and funds that are organized and operated primarily to support these institutions. Membership interest of the System Fund are measured using the unit value method. Under this method, each member’s investment balance is determined on a market value basis. The System Fund has a long term objective and is intended solely for the investment of endowment funds.
Reason for Policy
The University seeks to maximize income and minimize risks for its investments while complying with State and Federal laws related to investments, adhering to the Board of Trustee's investment guidelines, meeting donor restrictions, and maintaining liquid assets.
Frequently Asked Questions
Q: What are the investment options available for departments wanting to invest excess cash?
A: For expendable monies, short term investments. Depending on the account classification, funds can either participate in University’s Temporary Pool or State Treasurer’s Short-Term Investment Fund. Endowment assets are automatically invested in the Investment Fund with long-term objectives.
|Investment Accounting(Acct. Services)||Investment Accountantfirstname.lastname@example.org|
January 19, 2010