1.Purpose

N.C. General Statute 116-36.1 authorizes the Board of Governors of the University of North Carolina (“UNC”) to adopt uniform policies and procedures applicable to the deposit, investment, and administration of institutional trust funds and to delegate such authority through the President to the constituent institutions. Through UNC policy “600.2.4.1: Delegated Authority for Managing Institutional Trust Funds”, upon request by the Chancellor, the President may delegate authority to the Chancellor of a constituent institution to deposit, invest, and administer institutional trust funds consistent with N.C. General Statute 116-36.1.

The purpose of this policy is to provide guidelines for the investment of the University’s Institutional Trust (excluding, for example, research contracts, grants, and agency receipts) and Special Funds. This policy will delegate management responsibility for the execution of this investment policy; establish overall portfolio goals and objectives; and will identify permitted investment securities/funds and provide associated investment guidelines

2.Scope

This policy pertains to University’s Institutional Trust funds only (excluding,  for example, research contracts,  grants, and agency receipts) and Special Funds.  It does not apply to state funds.

3.Roles and Responsibilities

Authority to manage the investment program in accordance with this investment policy is granted to the University’s Vice Chancellor for Finance and Administration, who shall act and may further delegate the authority to execute and manage investments in accordance with any procedures and internal controls for the operation of the investment program consistent with this investment policy

4.Policy

4.1Philosophy

The university and its associated entities rely on operating cash to fund operations, pay debt service, and build rainy day funds. Therefore, an investment program for operating funds must rely on prudent, conservative methods of preserving cash while generating supplemental return. In this investment policy we seek to maintain the highest credit quality instruments, while limiting duration, sector, and counterparty risk. Limiting duration helps to reduce interest rate risk-the likelihood that movements in interest rates will affect the net asset value of investments in the program. It is likely that a substantial portion of UNCG’s and its associated entities operating cash will remain invested with the State of NC Treasurer’s Short Term Investment Fund (STIF). However, there may be opportunities to generate additional income with limited additional risk, particularly if duration increases slightly.

4.2Goals and Objectives

  • To preserve principal.
  • To optimize the use and investment of university cash and short-term investments.
  • To earn rates of return that consistently exceed money market rates of return over time to generate incremental resources for the central administration of the University.
  • To provide liquidity for university operating and capital needs.

4.3Benchmarks

  • Rate of return on the State of North Carolina Treasurer’s Short-Term Investment Fund (“STIF”).
  • Appropriate market-based indexes that represent the asset classes and duration of the underlying investments in a constructed portfolio.

4.4Investment Guidelines

Permitted investments include direct investments in the following publicly traded securities, in university-related funds, or in the holdings of external managers hired to invest on behalf of the university.

Asset SectorSector LimitIssuer/Fund Limit*Minimum Rating**
U.S. Treasury bills, notes, and bonds U.S. Treasury bills, notes, and bonds 50%50%AA/AA/AA
State of NC Treasurer’s Short Term Investment Fund (STIF) 100%100%N/A

*As a percentage of total balance of all “Institutional Trust and Special Funds”, less “Contracts and Grants” funds and “proceeds of bond issues”

** Ratings are listed from left to right for Moody’s, S&P, and Fitch Ratings, respectively.

4.5Custody

All investment securities and funds managed by external parties will be held in the name of the University by an independent third-party custodian selected by the University.

4.6Reports and Updates

This policy will be reviewed on an annual basis and a report will be prepared that provides investment results and recommends any potential updates to this policy.

5.Compliance and Enforcement

The Division of Finance and Administration will enforce and administer this policy in accordance with the N. C. General Statutes.

The policy administrator is the Vice Chancellor for Finance and Administration.

6.Additional Information

6.1Supporting Documents and Related Policies

6.2Approval Authority

Board of Trustees and Chancellor

6.3Contacts for Additional Information and Reporting

  • Responsible Executives:
    • Robert J. Shea, Jr., Vice Chancellor for Finance and Administration, 336-334-5200, r_shea@uncg.edu
    • Jerry D. Blakemore, Vice Chancellor of Institutional Integrity and General Counsel, 336-334-3067, j_blakem@uncg.edu
  • Responsible Administrators:
    • Paul Forte, AVC for Finance, 336-334-5806, pdforte@uncg.edu
    • Jennifer Leung, Budget Director, 336-256-1181, jwleung@uncg.edu
    • Amanda Nash, University Controller, 336-334-5180, awnash@uncg.edu

Revisions

Revision Date Revision Summary
09/29/2022 Adopted by Board of Trustees

- Investment Policy Statement for Institutional Trust and Special Funds. Retrieved 12/02/2022. Official version at https://policy.uncg.edu/university_policies/investment-policy-statement-for-institutional-trust-and-special-funds/. Copyright © 2022 The University of North Carolina at Greensboro.