Handbook of Business Procedures
Feb. 4, 2004
May 23, 2007
18.2. INVESTMENT POLICY
This policy applies solely to the local institutional funds of The University of Texas at Austin. The University of Texas Investment Management Company (UTIMCO) is responsible for the investment of the university’s endowment funds.
The Regents Rules and Regulations, Series 70201, Part 5, specifies that the chief business officer (this shall be the Chief Financial Officer in the case of UT Austin) of each institution is responsible for the re-balancing of investments between the Intermediate Term Fund (ITF) and the Short Term Fund (STF) on a monthly basis. The target allocation of local institutional operating funds is 15% in the STF and 85% in the ITF. Should the STF drop below 10% or exceed 20% of local institutional funds at the end of a month, the university is required to execute a re-balancing transaction.
All investments will be made in accordance to these guidelines and to those included in the UT System Financial Policy.
University of Texas Investment Management Company (UTIMCO)
University of Texas System Board of Regents University of Texas System Board of Regents' Rules and Regulations Series 70201*
Allocation for Non-Endowment Funds Policy Statement*
Index Fund Guidelines for Component (UTIMCO)*
The University of Texas at Austin may only invest in (i) any common trust fund or money market fund approved by UTIMCO, or (ii) any investment pool administered by UTIMCO for the investment of these local institutional funds.
The Vice President and Chief Financial Officer and the Associate Vice President and Chief Budget Officer are designated as the Investment Officers of The University of Texas at Austin and are responsible for the investment of the university’s funds in accordance with this policy, the University of Texas System requirements, the University of Texas System Regents Rules and Regulations, and the law.
Investments shall be made with judgment and care, under prevailing circumstances, that a person of prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation, but for investment, considering the probable safety of capital and the probable income to be derived.
In determining whether an Investment Officer has exercised prudence with respect to an investment decision, the determination shall be made taking into consideration:
- the investment of all funds, or funds under the entity's control, over which the officer had responsibility rather than a consideration as to the prudence of a single investment; and
- whether the investment decision was consistent with the written investment policy of The University of Texas at Austin.
The Vice President and Chief Financial Officer shall annually appoint an Investment Committee responsible for advising the Investment Officers on the investment performance of the university’s operating funds investments. The Investment Committee shall at minimum consist of the Investment Officers of the university but may at the Chief Financial Officer’s discretion also include other members.
The Investment Committee shall periodically meet to review the investment portfolio performance, investment positions and significant changes in market value and contemplate actions it believes appropriate to position the university’s investment portfolio to best accomplish the university’s investment objectives.
Investment Committee decisions shall be made by consensus vote. In the event of a tie vote, the consensus vote of the Investment Officers shall control. The Investment Officers have the responsibility to ensure that decisions made by the Investment Committee are carried out.
Any situation involving an Investment Committee member or Investment Officer, and/or his or her family that could reasonably be considered a conflict of interest must be disclosed to the Investment Committee as soon as possible after the potential conflict arises or can be anticipated. In no event may an Investment Committee member vote on an Investment Committee matter in which he/she has a known or possible conflict of interest. Ethics disclosures and conflict of interest disclosures shall be recorded in the minutes of the Investment Committee meeting and shall be reviewed by the university’s internal auditor for resolution, if necessary.
The market value of the portfolio shall be determined no less than quarterly and The University of Texas at Austin internal accounting system, *DEFINE, shall be adjusted to reflect the market value of the investments each quarter.
Each year the Investment Officers shall adopt a written statement asserting that they have reviewed the investment policy and investment strategy. This written statement shall also record any changes made to the investment policy.
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