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:
|
Target
Allocation |
%
Range |
Total Long-Term Fund |
|
|
Total
Multi-Strategy Equity Fund |
65% |
55-75% |
Total
Multi-Strategy Bond Fund |
25% |
15-35% |
Total
Private Capital
(Commonfund Capital Inc.) |
5% |
0-10% |
Total Private Real Estate (Commonfund Realty Investors, LLC) |
5% |
0-10% |
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 |