Name: University of Kentucky Office of Development
Assets Under Management: $1.1 Billion (Source: University of Kentucky on 6/30/2014)
Annual Report: Endowment Investment Policy – University of Kentucky
Portfolio Insights: “The University of Kentucky Endowment (“Endowment”) is an aggregation of funds comprised of gifts from donors and grants from the Commonwealth of Kentucky with the requirement they be invested in perpetuity to generate a reliable and steadily growing revenue stream to support the mission of the University now and in the future. The revenue stream, or total return spending distributions, supports scholarships, chairs, professorships, basic research, as well as academic and public service programs, as defined by the individual endowment agreements. The Endowment is expected to provide fiscal stability since the principal is invested for long-term growth and total return spending distributions are generated year after year.” (Source)
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Top University of Kentucky Endowment Fund Headlines:
1) University of Kentucky’s endowment fund posted a 11.6% return for the annual period that ended in June thanks to support from a surging equity market, meeting documents indicate. On Sept. 9, the University’s Investment Committee reviewed investment performance for the 2013 year that ended June 30. The results list that the endowment pool surpassed its policy benchmark by 150 basis points, recently posted minutes highlight. The Lexington, Ky.-based institution’s Committee noted that “strong relative performance” by international equity, fixed-income and absolute return managers was cut out by a “2.0% loss during the month of June due to market uncertainty.” (Source)
2) University of Kentucky, Lexington, expects to issue RFPs for real estate and real assets managers for its $1.2 billion endowment, recent investment committee minutes indicate. The real estate RFP is expected to be issued later this year, and the real assets search in 2015. The endowment’s actual allocation to real estate is 11.8%, which includes 5.4% of unfunded commitments, and is on track to meet its 12% target by 2017. Additional information on the real estate search could not be learned by press time. Private closed-end funds will be considered for the real assets search, and funding is expected to come from Wellington Management liquid real asset funds. The size of the Wellington funds and further information about the search could not be learned by press time. (Source)
3) The University of Kentucky (UKY), with $1.06 billion in endowment assets, has granted its investment team more discretion to pick managers and anticipates bringing on its first-ever cio in the spring. The changes will strengthen the investment office as it readies for upcoming real assets searches, its first entry into direct hedge funds and a multi-year push to expand its private markets footprint.
“When we crossed the billion dollar mark in 2013, it seemed the right threshold to reevaluate the need for a cio,” said Susan Krauss, interim treasurer who serves as de facto cio. “With a more diverse asset allocation implemented in 2008, and growing exposure to alternatives, the portfolio has become more complex and challenging for one person to handle.” The university is evaluating candidates and anticipates hiring a cio by April’s close. It is not accepting new applicants. (Source)
4) The $920 million University of Kentucky Endowment Fund is set to double its target allocation to hedge funds. The move is in line with decisions by other institutional investors — namely large US pensions — that have boosted direct hedge fund allocations to tackle underfunding. The increasing attractiveness of the asset class is reflected by a recent report from Preqin that revealed institutional investors now constitute the largest piece of the hedge fund capital pie. According to HFMWeek, the Kentucky university, which started investing in hedge funds in 2009, approved a recommendation to double its target hedge fund allocation to 20% — a percentage suggested by consultant RV Kuhns & Associates last year following an asset allocation study. The heightened hedge fund target was shared between the fund’s three existing hedge fund managers: Grosvenor, Gam and Berens. The revised investment policy aims to “reduced the projected risk of the endowment,” HFWeek reported. (Source)
5) The University of Kentucky Alumni Association is pleased to announce the beginning of a new tradition at UK — a Wildcat sculpture! The intricately detailed bronze sculpture is the centerpiece of Wildcat Alumni Plaza and represents the dignity, strength and vigilance in which the University of Kentucky family takes great pride. The sculpture serves as a symbol of the University of Kentucky and a touchstone that will inspire a sentimental connection among present and future alumni to their alma mater. The idea of a Wildcat sculpture was suggested by a group of student leaders, and with the support of the campus community, the UK Alumni Association lead the plaza project in hopes that it would help build a stronger connection among UK alumni and future generations of Wildcats. The plaza also strengthens UK and supports students because all net proceeds from paver sales go to the UK Alumni Association Scholarship Endowment fund to help raise money for scholarships for deserving UK students. (Source)