Campus Photo
In this section

Search Our Site:

University at Buffalo Foundation, Inc.

P.O. Box 900
Buffalo, NY 14226-0900
Phone: (716) 645-3013
Fax: (716) 645-3475
Contact Us

Investment Performance and Policies

Download Printable PDF

To learn more about UB Foundation investments, please see the Financial Information page, which includes 990s and audited financial statements.

June 30, 2014

The Portfolio and its Management

At June 30, 2014 the market value for total investments of the University at Buffalo Foundation and Affiliates (UBF) amounted to $864.4 million, as compared to $761.5 million at June 30, 2013 and $736.3 million at June 30,  2012.  Endowment funds included in total investments amounted to $624.8 million at June 30, 2014, as compared to $554.4 million at June 30, 2013 and $511.0 million at June 30,  2012.  These funds are managed under the supervision of UBF’s board investment committee.  More than sixty professional investment managers currently share in the administration of the portfolio, with performance monitored by the trustees.  Included in this total are certain investments, known as the Long-Term Portfolio and having a market value of $822.7 million at June 30, 2014, which are managed and administered on a pooled basis.

Long-Term Portfolio Investment Strategy

The primary investment objective is to maximize total investment return while preserving the inflation-adjusted purchasing power of the portfolio.  This should provide a relatively predictable, constant and stable (in real terms) stream of funds for current use.  Total investment return is the sum of interest, dividends and capital appreciation.

Long-Term Portfolio Performance Compared to Benchmarks for Fiscal 2014

 
Total Return
  1 Year 3 Year
Long-Term Portfolio 15.8% 8.8%
Policy Benchmark 16.2% 8.2%
CPI +5% 7.3% 7.0%
U.S. Equity
  1 Year 3 Year
Long-Term Portfolio 21.6% 15.6%
Dow Jones US Total 25.0% 16.4%
S&P 500 24.6% 16.6%
International Equity
  1 Year 3 Year
Long-Term Portfolio 20.1% 7.4%
MSCI AC World ex USA 21.8% 5.7%
Fixed Income
  1 Year 3 Year
Long-Term Portfolio 5.1% 4.6%
Barclays Aggregate 4.4% 3.7%
Real Assets
  1 Year 3 Year
Long-Term Portfolio 20.8% 5.9%
S&P North American
Natural Resources
33.1% 6.7%
NCREIF Townsend
Blended Index
13.1% 13.5%
Hedge Funds
  1 Year 3 Year
Long-Term Portfolio 10.8% 7.5%
HFRI Fund of Funds 7.7% 3.3%
Private Equity
  1 Year 3 Year
Long-Term Portfolio 20.8% 11.5%
Venture Economics
All Private Equity Index
21.9% 15.0%

*Key to Indices

 

Policy Benchmark:

20% S&P 500 / 15% MSCI EAFE / 2% Barclays US TIPS / 9% Barclays Aggregate / 2% 91 Day T-Bills / 20% HFRI Fund of Funds Composite Index / 2% MSCI Emerging Markets / 4% Spliced Emerging Markets Index / 5% Citi WGBI / 5% S&P North American Natural Resources Sector Index / 2% NCREIF Townsend Blended Index / 12% Venture Economics All Private Equity Index / 2% Mercer Illiquid Natural Resources Index
S&P 500 Standard and Poors 500 Index
MSCI Morgan Stanley Capital International
WGBI World Government Bond Index
NCREIF National Council of Real Estate Investment Fiduciaries
EAFE Europe, Australia, Far East
HFRI Hedge Fund Research, Inc.

Long-Term Portfolio Performance Compared to Benchmarks for Fiscal 2005-2014

The accompanying chart reflects the ten-year performance for the Long-Term Portfolio in comparison with over 800 other colleges and universities across the country.

Average Annual Compounded Nominal Return Fiscal Years Ended June 30
  Return NCSE Mean
2014 15.8% 15.5%
2012-2014 8.8% 9.0%
2010-2014 11.4% 11.7%
2005-2014 6.5% 7.1%

NCSE - NACUBO - Commonfund Study of Endowments

Asset Allocation Policy

The proper distribution of investments among various asset classes allows UBF to honor spending policies, maintain risk tolerance and stability, produce appropriate investment returns, and achieve long-term objectives.

Asset allocation at June 30, 2014 was as follows:

 
By Manager Type Long-Term Portfolio Current Target Long Term Target
Growth Assets      
•US Equity      
-Large 10.9% 16.0% 11.0%
-Large Quality 10.8% 8.0% 8.0%
       
•International Equity      
-Large 16.4% 16.0% 12.0%
-Emerging Markets 5.3% 6.0% 6.0%
       
•Growth Fixed Income 4.6% ----- -----
       
•Private Equity 10.9% 12.0% 20.0%
       
Risk Reduction Assets      
•Cash 1.9% ----- -----
•US Fixed Income 8.1% 10.0% 8.0%
•Hedge Funds 19.4% 20.0% 20.0%
       
Inflation Protection Assets      
•US Inflation Protected Fixed 1.7% 2.0% -----
•Real Assets 10.0% 10.0% 15.0%
       
TOTAL 100.0% 100.0% 100.0%

NOTE: Long term target is goal for 2020.

Spending Policy

Spending is defined as funds made available from the portfolio for university programs and administrative expenses, exclusive of management, brokerage and custodial fees.

Generally, a formula governs the portion of total return made available each year for spending with an objective of maintaining purchasing power relative to inflation. This formula allows spending to increase by the predetermined annual growth rate of 3% as long as spending stays within 4% and 6% of the three-year average market value of principal. Special spending rules are followed for individual endowments where the value has fallen below historic dollar value.

Long-Term Portfolio Performance -1995 to 2014

A $1,000,000 gift on July 1, 1995 invested in the Long-Term Portfolio would have been worth $1,516,302 as of June 30, 2014, prior to the Fiscal Year 2015 distribution.  In addition, $1,331,518 would have been distributed for spending needs from July 1, 1996 through July 1, 2014.

A $1,000,000 gift on July 1, 1995 invested in the Long-Term Portfolio would have generated $46,896 for spending in Fiscal Year 1997, with the annual distribution growing to $65,990 for Fiscal Year 2015.  The growth in spending is comparable to inflation rate growth over this period.