All Arch funds shall be invested according to the policies defined by Arch's Investment Committee and in accordance with the Board of Trustees. The investment strategy is defined in two broad categories:

• Short-term/non-endowed funds and operating funds

• Long-term/endowed funds

Management of Arch Investments

The Board of Trustees vests authority to recommend and implement investment policy with the Investment Committee. This Committee reports to the Board at each meeting regarding the status of Arch's investment policies and results as well as reports any recommended changes in investment policy to the Board.

A.  General Functions of the Finance and Compensation Committee

1. The Investment Committee shall review regularly all investments of Arch. Its principal function shall be to develop and recommend to the Board such investment and investment related policies as it deems appropriate. No member of the Investment Committee shall have or appear to have a conflict of interest that impairs or appears to impair the member's ability to exercise independent and unbiased judgment in the good faith discharge of his or her duties. TOP

2. The Committee shall make regularly scheduled reports to the Board of Trustees.

3. The Committee shall recommend to the Board appropriate policies and procedures for custodianship and access to securities held by the Pool as it may deem proper. TOP

4. The Executive Director, or his/her designee, shall be the Secretary of the Committee and shall keep minutes of the actions of the Committee. The Executive Director is responsible for the daily cash management and short-term investments.

5. The Committee may engage an investment consultant to work with staff and advise staff and the Committee, on the aspects of investment management including, but not limited, to overall investment strategy, general asset allocation, target asset allocation, market trends, investment manager and custodian selection, manager and custodian evaluation criteria, and any other appropriate matters. TOP

B. Specific Functions of the Investment Committee (with Board approval)

1. establish investment objectives for the Long-Term Investment Pool and Short/Mid-Term Pools

2. set asset allocation and manager structure policies for the investments TOP

3. establish and continue to update an investment policy and report the recommended changes to the Board

4. select investment managers and an investment consultant for the investments

5. establish, monitor, and update the investment process

6. review investment performance against established objectives

7. review at least annually investment activity to ensure compliance with investment policy

8. establish the spending rate for the Pool TOP

Long-Term Investment Policy and Guidelines

The goal of the investment program for the Long-Term Pool (hereinafter referred to as "Pool") is to provide a real total return from assets invested that will preserve the purchasing power of Pool capital, while generating an income stream to support the activities of the funds held by Arch. Achievement of the real total return will be sought from an investment strategy that provides an opportunity for superior total returns within acceptable levels of risk and volatility. TOP

A. Investment Objective

For the long-term, the primary investment objective for the Pool is to earn a total return (net of investment and custodial fees) within prudent levels of risk, which is sufficient to maintain in real terms the purchasing power of the Pool. TOP

B. Asset

The Long-Term Investment Pool is made up of Commonfund’s Multi-Strategy Equity Fund, Multi-Strategy Bond Fund, Commonfund Capital Inc., and Commonfund Realty Investors, LLC. The Strategic asset allocation adopted by the Board is as follows:

Allocations to each Fund are reviewed by Staff on a monthly basis.

C. Spending Guideline

Annual spending for the Pool is determined on a calendar year basis by multiplying a specified rate determined by the Investment Committee and the trailing thirty-six month average principal market value of the Pool. See Section VII.C. for more details. TOP

D. Gift Policy

It is anticipated that, from time to time, Arch will receive gifts in the form of marketable securities. In such events, the Committee will instruct the Financial Services Officer to liquidate the securities as soon as possible. In the event that the securities are restricted from sale for a designated period of time, Arch will hold said securities until the restricted period has elapsed and then liquidate the securities as soon as possible thereafter. Arch will make no attempt to add value to the Pool by holding the gifted securities unless specifically instructed to do so by the donor of said securities. TOP

E. Custodian and Depository Activities

The custodian and depository activities of the Pool, including agreements with any banks for the temporary, short-term investment of cash and equivalents, will be subject to annual review by the Committee to assure that Arch is receiving competitive rates and services. TOP

Management of Short-Term Investments

The goal of the investment program for the short/mid term investments is to provide support for the operational needs of Arch while maintaining low risk of principal. TOP

Investment Objective

For the short-term, the primary investment objective is to support the daily operational needs of Arch while preserving the safety of the principal and when possible, to provide for the movements of funds into mid-term and long-term investments to enhance investment returns for the unrestricted operations of Arch. TOP