University of Notre Dame Endowment
1. What are the overall objectives of University of Notre Dame Endowment?
The overall objectives of the endowment were to support the purposes of the University and its mission over the long-term. Practically speaking, the objectives were; 1) to maintain and preserve the real value of the endowment; 2) to obtain a predetermined amount of investment earnings each year to provide financial support for individual University programs; 3) remain as a conduit for vital operations support for the University i.e. to manage the permanent funds of the University and its respective donors and to allocate funds in accordance to donor wishes and programs of their choice.
2. Calculate the return objectives and risk of the endowment
The objectives of the fund were meant to achieve a total rate of return equal to inflation plus 5.5% notwithstanding management fees. Risk is considered average or above average as per Saturday session with Emmanuel.
3. Discuss the components of the Investment Policy Statement as it relates to liquidity, time horizon, taxes, regulatory and unique circumstances of the University of Notre Dame Endowment.
The IPS outlines its desire for high performance, risk-adjusted returns through diversification, a long time-horizon, top-notch outside managers, and the expectation of proportional returns for illiquid investments. Malpass diversified beyond the Endowments traditional asset classes of large-cap stocks and plain vanilla bonds by allocating significant proportions of the portfolio to hedge funds, private equity funds, and other alternative assets. Malpass understood the importance of maintaining the integrity of the portfolio by balancing liquidity and lock-up constraints while avoiding the need to sell assets at distressed prices and also by maintaining a spending rate between 4 and 5 percent. It was emphasized that the team had to maintain the Endowments reputation as an “excellent investment partner”.
Other particularities
The overall objectives of the endowment were to support the purposes of the University and its mission over the long-term. Practically speaking, the objectives were; 1) to maintain and preserve the real value of the endowment; 2) to obtain a predetermined amount of investment earnings each year to provide financial support for individual University programs; 3) remain as a conduit for vital operations support for the University i.e. to manage the permanent funds of the University and its respective donors and to allocate funds in accordance to donor wishes and programs of their choice.
2. Calculate the return objectives and risk of the endowment
The objectives of the fund were meant to achieve a total rate of return equal to inflation plus 5.5% notwithstanding management fees. Risk is considered average or above average as per Saturday session with Emmanuel.
3. Discuss the components of the Investment Policy Statement as it relates to liquidity, time horizon, taxes, regulatory and unique circumstances of the University of Notre Dame Endowment.
The IPS outlines its desire for high performance, risk-adjusted returns through diversification, a long time-horizon, top-notch outside managers, and the expectation of proportional returns for illiquid investments. Malpass diversified beyond the Endowments traditional asset classes of large-cap stocks and plain vanilla bonds by allocating significant proportions of the portfolio to hedge funds, private equity funds, and other alternative assets. Malpass understood the importance of maintaining the integrity of the portfolio by balancing liquidity and lock-up constraints while avoiding the need to sell assets at distressed prices and also by maintaining a spending rate between 4 and 5 percent. It was emphasized that the team had to maintain the Endowments reputation as an “excellent investment partner”.
Other particularities