The University of New Hampshire Foundation, Inc. is committed to prudent, time-tested investment strategies and fiscal policies. The Asset Allocation Committee is charged with overseeing these funds and measuring the re-turns they produce against nationally recognized standards for investment performance. Careful management of the UNH Foundation endowment assets by evaluating the risk, reward and liquidity of various asset classes has a long-term goal of producing a total return necessary to preserve and enhance the real dollar principal of the funds, while providing a dependable source of income for current Foundation and University operations and programs.

In managing the Pooled Income Fund and the trusts created by UNH donors, the goal is to provide a consistent level of annual income for fund beneficiaries, while also seeking long-term growth of principal. Endowment growth is due not only to the generosity of thousands of alumni, parents, friends, corporations and foundations, but also to the careful steward-ship provided by a group of knowledgeable Foundation Board members who have invested these gifts wisely.

Edward K. Roundy ’72

Vice President and Treasurer

Managing Foundation Investments | Investment Policy | Payout | Investment Management | Investment Allocation and Performance

Managing Foundation Investments

Careful management of the UNH Foundation endowment assets ensures a total return necessary to preserve and enhance the real-dollar principal of the funds, while providing a dependable source of income for current Foundation and University operations and programs.

Investment Policy

The Foundation's investment policies are intended to preserve or increase the real principal value of its endowment, while providing a dependable stream of income for the University. Portfolio management follows guidelines recommended by the Investment and Finance Committee and approved by the UNH Foundation Board. While the endowment has a long time horizon (perpetuity), stability of payout over shorter periods is desirable. The Board, therefore, carefully weighs risk/return and liquidity characteristics in its asset allocation decisions. The Foundation's portfolio is diversified so as to keep volatility within acceptable limits for the portfolio as a whole. It consists of:

Equity Investments

These are intended to provide current income, growth of income, and appreciation of principal, with the recognition that this asset class requires the assumption of greater market volatility and, at least in the short term, risk of loss. Under guidelines set by the Investment Committee, these may account for between 30 percent and 70 percent of total assets at market value. International equities are included in this figure. Alternative investments, private equity, commodities, TIPS, and real estate may comprise up to 25% of total assets.

Bonds and Short-Term Securities

These provide a highly predictable and dependable source of income that reduces the volatility of the total portfolio market value. They may also provide a source of funds for alternative investments. Bonds may account for 0 to 20 percent of total assets at market value. This could include U.S. Treasury and high yield bonds. Cash/intermediate investments may account for up to 20 percent.

Other classes of investments may be used to provide opportunities for higher rates of return, but only when the endowment pool has reached a size that the Investment Committee feels can support higher risk and/or reduced marketability.

The endowment is managed for total return, with a stated portion of total valuation applied annually toward donor and Foundation-designated purposes.

Payout

Currently, total payout is calculated on an annual basis at 5.00 percent of a 12-quarter retrospective moving average of unit value of the endowed fund, with 4.0 percent going to program purpose and 1.00 percent to program management expenses. Raising the level of payout and reducing expenses remains a goal of the UNH Foundation. All remaining gains (or losses) in value are attributed back to the unit values. The fund is managed under a total return concept within New Hampshire's Uniform Prudent Management of Institutional Funds Act.

Investment Management

The Investment and Finance Committee engages investment managers for the management of the Foundation's endowment assets. Because this management remains consistent despite periodic personnel changes in Board or Investment and Finance Committee composition, it permits the achievement of longer-term objectives. In June of 2008, the Foundation hired Prime Buchholz of Portsmouth, New Hampshire as our investment advisors to assist the board.

The investment managers have discretion with regard to portfolio composition and individual asset selection, within guidelines and constraints established by the committee. The committee oversees the activities and results of the managers through regular meetings, as well as written and oral communication.

The Foundation employs a combination of active and passive managers. Active investment managers are expected to provide an appropriate excess return, net of fees, over a normal portfolio or a relevant index, e.g., the S&P 500. Their performance should place them well into the second quartile of managers with similar objectives over a market cycle. Passive managers are expected to track the performance of the appropriate normal portfolio or index within agreed tolerances.

Investment Allocations and Performance as of June 30, 2011