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Image 14 of Minutes of the University of Kentucky Board of Trustees, 2012-02-21

Part of Minutes of the University of Kentucky Board of Trustees

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-14- Mr. Roberts wanted to emphasize, that the work life survey, provided a progress report that the work enviromnent and culture, work life effectiveness and employee engagement at UK are all improving or have improved since 2005. He wanted to thank Ms. Pease and Ms. Wilson for their hard work and the progress that has been made since 2005. Mr. Roberts reported that a motion was made at the committee meeting to request that the full report be presented to the full Board of Trustees later this spring. He also wanted to mention that the report and presentation are available from Ms. Pease at any time. S. Investment Committee Report Mr. Gatton, chair of the Investment Committee, reported that the committee met that moming, to review perfonnance results and conduct other business. The Endowment had an estimated net market value of $860.2 million as of January 31, 2012. For the seven months ending January 31st, the Endowment pool lost 2.4%, as compared to the policy benchmark retum of -1.4%. The Committee voted to extend the contract for investment consultant services of R. V. Kuhns & Associates, for the period April 1, 2012 through June 30, 2013. The purpose was to align it with the fiscal year. The University hired R.V. Kuhns & Associates, or RVK, in early 2008 as a result of an RFP process. The Investment Committee interviewed four finalists and selected RVK to provide consulting and perfonnance measurement services for the UK Endowment beginning April 1, 2008. The contract with RVK was structured with a fixed tenn of four years expiring March 31st and allowed up to four one-year extensions at the option of both parties. The fifteen month extension at this time simply aligns the contractual tenn with UK’s fiscal year. RVK has assisted the University with diversification ofthe Endowment investments over the last four years. Since hiring RVK, the University has implemented an absolute retum and expanded the private equity and real estate allocations. This diversification effort is expected to enhance investment retums and lower the volatility of retums over the long tenn, defined as ten or more years. RVK consultants attend the quarterly Investment Committee meetings to review perfonnance results and advise on asset allocation issues. The Investment Committee reviewed results of the 2011 NACUBO-Commonfund Study of Endowments released in late January. NACUBO, the National Association of College and University Business Officers, is an organization of 839 public and independent institutions. The report of endowment values as of June 30, 2011 showed UK’s endowment size ranked 81st, in the top 10 percent. The average retum of participating institutions was 19.3% for the year ending June 30, 2011, however UK earned 18.7% . UK has gradually reduced its equity exposure over the last three years, increasing the allocation to absolute retum and other altemative strategies in an effort to reduce the volatility of retums, as mentioned previously. The Committee reviewed a benchmarking summary of 2011 retum and asset allocation data for the new benchmark institutions selected by the University Review Committee. The University’s target asset allocation is in line with the average allocation of the eleven benchmark institutions. T. Student Affairs Committee Report

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