Brandeis University Endowment Fund Investment Policy Statement

Introduction

The Brandeis University Endowment Fund (the “Fund”) has been established to fund scholarships, fellowships, faculty salaries, programs, activities, and facilities, all of which are designed to promote and advance the mission of Brandeis University (the “University”). 

This Investment Policy Statement (“Statement”) is established by the Investment Committee of the Board of Trustees (the “Committee”) for the guidance of the Committee, the Office of Investment Management (the “Investment Office”), and other fiduciaries in the course of investing the monies of the Fund.  This Statement sets forth an appropriate set of goals and objectives and defines guidelines for the Fund's assets.  The Committee may amend this Statement both upon its own initiative and upon consideration of the advice and recommendations of the Investment Office. It is the policy of the Committee to review these goals and objectives at least once per year. Any substantive changes to the policy require approval by the Board of Trustees. 

Statement of Goals and Objectives

The investment goals and objectives for the Fund are as follows:

  1. The Fund’s investment objective is to maximize risk-adjusted returns over a long-term horizon.  The Fund intends to achieve this objective by investing in multiple asset classes. These assets classes may include equities (developed, emerging, private equity), hedge funds, credit, real estate, energy, and fixed income.
  2. In order to meet the primary investment goal of the Fund, the average annual net total return over an extended period, after adjusting for inflation, should be sufficient to support a prudent spending rate as determined by the Board and sufficient to maintain the real (inflation-adjusted) value of the spending for the future. In order to have a reasonable probability of achieving the Fund’s primary investment goal at an acceptable risk level, the Committee has adopted a long-term asset allocation policy. The overall capital structure target and permissible ranges for asset classes are detailed in Appendix I.

    The asset allocation will be determined, considering, among other things, the Fund’s spending needs, liquidity and future endowment cash flows, the maximum endowment support available to the operating budget under various negative financial market scenarios, and the University’s financial condition including the amount of its liquid reserves.  Also considered will be the expected long-term rates of return, volatility, and correlations among asset classes.  The actual asset allocation will be reviewed on a quarterly basis and will be readjusted when an asset class weighting is outside its target range, or at the Committee’s discretion.

Brandeis University Endowment Asset Allocation Policy (updated 4/28/20)

In order to have a reasonable probability of achieving the Fund’s investment goals and objectives at an acceptable risk level, the Committee has adopted the long-term asset allocation target and asset class ranges outlined below.  The Committee may intentionally deviate from the long-term asset allocation target from time to time, while remaining within the target range.

Overall Portfolio Risk Level

Target

Target Range

Beta-Adjusted Equity Exposure

70%

+/- 10%

 

Asset Class Ranges

Asset Class

Target Range

 

Equities

20-60%

 

Hedge Funds

20-50%

 

Real Assets

0-25%

 

Fixed Income

5-30%

 

The Fund’s Policy Benchmark is a custom benchmark designed to indicate the returns that a passive investor would earn by consistently following the asset allocation targets set forth in this investment policy statement.  The Policy Benchmark is 70% * (2/3 MSCI ACWI + 1/3 S&P 500) + 20% T-Bills + 10% 10-year Treasuries. The policy benchmark is set based upon the beta-adjusted equity target.

Proxy Voting

Responsibility for the exercise of ownership rights through proxy solicitations shall rest solely with the investment managers, who shall exercise this responsibility strictly for the benefit of the Fund.  Managers shall report annually to the Investment Office their standing policies with respect to proxy voting, including any changes that have occurred in those policies.

At the request of the Investment Office, investment managers shall provide a written annual report of the proxy votes for all shares of stock in companies held in the Fund’s investment program.  These reports shall specifically note and explain any instances where proxies were not voted in accordance with the investment manager’s standing policy.