Part 4 Subpart 4-8 Investment Policy

Sec. 4-805. Other Investment Parameters.

No more than 10% of the portfolio, at cost, can be invested in any single issue, except U.S. Government Securities. Portfolio holdings must be sufficiently liquid to meet the ongoing cash flow needs of the university.

University personnel will consider factors such as the overall level of deposits and investments maintained with primary banks and anticipated cash flow needs when placing investments. The use of additional banks for investment purposes will be considered in providing diversification. University personnel will review capital ratios of all banks utilized for investment purposes and select banks whose capital ratios reflect well capitalized ratios by FDIC. The use of bank products that provide additional protection such as collateral, or segregation of assets in trust departments may be used. The maximum amount of deposits and investments held with each primary bank will be $20 million. The maximum amount of investments held with any other one bank will be the lesser of 25% of the short term portfolio or .5% of the bank’s total assets.

The duration for each long-term fixed income investment manager shall not vary more than +/-20% than that of the appropriate benchmark for each manager with the exception of global bond managers who do not manage the portfolio to any preset average duration. For diversification purposes, each long term equity manager should have 20 or more positions.