exceed $6.7 million. The acquisition, if successful, would be used to house student instructional
space for the College of Fine Arts. Mr. Stucke1t moved approval. Dr. McCorvey seconded.
After brief discussion, the motion carried without dissent. Its passage received an enthusiastic
round of applause from a large contingent of College of Fine Arts faculty, staff; and students in
attendance. (See FCR 11 on the Board of Trustees website, www.uky.edu/ Trustees, under
X. Proposed Amendment to Goveming Regulations: Technical Corrections (FCR
Mr. Stucke1t explained that FCR 12 is the first reading of an amendment to Goveming
Regulations, Part II (GR II). The proposed revision does not include substantive changes. The
revision consists of technical corrections necessary to bring the GR into consistency with other
University regulations and practices. Mr. Stuckert moved approval. Ms. Curris seconded, and
the motion carried without dissent. (See FCR 12 on the Board of Trustees website,
www.uky.edu/Trustees under agenda.)
Y. Investment Committee Report
Dr. Brockman passed the floor to Mr. Gatton, chair ofthe Investment Committee, for his
report. Mr. Gatton stated that the Investment Committee met that moming to review
perfonnance results and conduct other business. The Endowment had a net market value of
$909.5 million as of April 30, 2011. For the 10 months ended April 30th, the Endowment pool
retumed 20.7 percent, which is in line with the policy benchmark retum of 20.9 percent.
The Committee approved the Endowment Investment Policy, which is fonnally reviewed
and approved on an annual basis. Minor changes were made to the target asset allocation and
manager structure, which is designed to produce an average annual retum of 7.5 percent over the
long tenn, defined as 10 years or more. If achieved, the 7.5 percent annual retum should allow
the University to support the 4.5 percent annual spending and management fee withdrawals and
maintain the inflation-adjusted value ofthe Endowment.
The Committee met in a special session at Keeneland on Monday, June 13 and heard
presentations from two of its investment managers, Grosvenor and PIMCO. Grosvenor manages
an absolute retum strategy for the University, and PIMCO manages a real retum strategy and two
fixed income strategies for the University. Grosvenor and PIMCO are the University’s largest
active managers with target allocations of 12 percent and 16 percent, respectively. The finns
provided the Committee a market outlook and strategy update.
Investment staff and consultant R. V. Kuhns & Associates have issued Requests for
Proposals to hire additional private equity and real estate managers. The University has been
building the allocations to private equity and real estate slowly over the last several years in
order to achieve vintage year diversification. Staff and R. V. Kuhns plan to make finalist
recommendations at the September Investment Committee meeting.