The office oversees the university’s endowment portfolio. This includes working with and monitoring existing managers, evaluating new investment opportunities, working with outside consultants and advisory firms, and performance reporting.
Mission and Objectives
The overriding principle for the management of the endowment is intergenerational equity, ensuring that the endowment maintains or enhances its value for the long-term. This, combined with the fact that the endowment significantly contributes to the university’s operating budget, requires that the portfolio be managed for total return.
Therefore, the asset allocation policy is based on broad diversification. Each asset class serves a distinctive role within the portfolio’s diversification. Management and investment decisions are made in a top-down manner with consideration for the total portfolio and return.
| Asset Class | Policy Range |
|---|---|
| Public Equity | 5%–45% |
| Equity Hedge | 5%–45% |
| Private Equity | 5%–20% |
| Absolute Return | 5%–30% |
| Real Assets | 5%–15% |
| Fixed Income | 5%–20% |
| Cash | 5%–20% |
Target Return
The annual endowment target return is 6.7%.
Spending Policy
The university’s spending guideline is rooted in the constant growth model. This means that spending will increase annually at 2.5% provided that calculated spending is less than the predetermined ceiling. Should the forecasted spending exceed the ceiling, then spending is reduced. The annual target is to spend approximately 5.0% from the endowed funds beginning market value.
Oversight
The Endowment Management & Finance Committee (the “Committee”) of the Board of Trustees is charged with oversight of the university investment assets. This includes the endowment, cash and planned giving assets. In addition, the group is responsible for advising the administration and Board on the university’s debt financing strategies. With this the Committee is able to consider the university’s financial operations as a whole when assessing decisions and recommendations.
The Investment Office, consisting of the Chief Investment Officer/Treasurer and four full time internal employees, serves as the primary staff for the endowment. This group is responsible for both the investment and operational components of the portfolio. In addition, the team communicates and meets with the Committee on a regular basis.
Giving
In addition to growth through investment management and returns, the endowment value grows through generous gifts from ߲ݴý friends and family. You can learn more about ways to be part of the ߲ݴý legacy at colgate.edu/give.