Investment Management
The UO Foundation is committed to careful stewardship of private gifts in support of the University of Oregon.
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The Foundation's Board of Trustees has fiduciary responsibility for the investment of the Foundation's assets, including the allocation of funds to various asset classes and the engagement of professional investment managers. Currently, the Foundation's Investment Committee oversees the investment program in accordance with established guidelines approved by the Foundation's Board of Trustees. The overall investment objective of the Foundation is to (i) provide an annual distribution for endowments to support designated university activities as determined by the Board of Trustees, and (ii) to achieve a long-term growth rate that maintains the purchasing power of the assets, as measured by the consumer price index.
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Effective July 1, 2021, the Foundation moved to an outsourced investment management model in an effort to boost risk adjusted returns and create additional fiduciary safeguards. The relationship with Jasper Ridge Partners is managed by members of our leadership team and our Investment Committee, which consists of Foundation Trustees with strong financial and investment management skills.
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Jasper Ridge Partners manages approximately $34 billion in assets for select families, endowments, foundations, pension funds, and sovereign wealth funds. They have a team of nearly 100 investment and operations professionals managing multiclass asset and diversified portfolios, as well as tailored, asset-class specific mandates.
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The UO Foundation currently manages over $2.8 billion of assets, including gifts made to endowed funds, expendable funds and deferred gifts.
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Expendable Funds: Gifts to expendable funds are immediately available for spending at the request of the UO; therefore, the investment approach emphasizes preservation of capital—highest possible return with low risk.
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Deferred Gifts: Deferred gifts are managed individually, rather than pooled, because each is unique in terms of payout rate and investment horizon. This strategy allows a variety of asset allocation options to be utilized to best satisfy donor needs.
Endowed Funds
The Foundation's endowment portfolio consists of donor funds invested to support the educational mission of the University of Oregon in perpetuity. These funds are invested to support students, faculty, research, academic programming and facilities as follows:
Endowment Funds by Purpose
Student Scholarships
30%
Academic Support
23%
Facilities
1%
Other UO Support
46%
As of June 30, 2023, the endowment reached a market value of $1.47 billion. Gifts to the endowment are pooled together in a fund of one investment vehicle structure and referred to as the Villard Investment Pool (VIP). The strategy of the VIP asset portfolio focuses on varied traditional and nontraditional investment opportunities.
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The VIP is also diversified across underlying management sectors, risk factors, and liquidity characteristics. The diversification minimizes risk for any given level of expected return and earns incremental expected return by committing prudently to illiquid assets.
Endowment Asset Allocation
(as of June 30, 2023)
Private Equity/Venture Capital
33.7%
Hedge Funds
17.6%
Public Equity
22.4%
Fixed Income
14.1%
Real Assets
6.9%
Cash & Other Assets
5.4%
The VIP's investments are subject to various risk factors including market, credit, and industry risk. Market risk represents the potential loss in value of financial instruments caused by movements in market variables, such as interest rates. Other risks affecting these investments include, but are not limited to, increasing competition, rapid changes in technology, and changes in economic conditions. While portfolio diversification can reduce idiosyncratic risk, overall market risk cannot be eliminated. The audited financial statements include more details about the Foundation’s endowment portfolio and other investments.
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Through endowed funds, the ongoing generosity of donors multiplies and sustains opportunities for countless generations to come. The Foundation is proud to be a trusted partner in connecting and supporting donors and the University of Oregon.
Endowment Investment Performance
— Villard Investment Pool
The endowment's performance is designed to be consistent, stable, and less dependent on any one type of investment or any one particular economic environment. Greater focus is placed on generating consistent returns measured over longer periods of time. The ultimate objective is to first protect, then perform, and finally, as a result, provide to the university.
Endowment Returns (as of June 30, 2023)
10.1%
11.3%
9.4%
5.9%
9.2%
10.3%
5.0%
8.6%
6.7%
7.7%
5.5%
2.5%
0.9%
-2.6%
-1.8%
Since JRP (6/30/2021)
Trailing 1 Year
Trailing 3 Years
Trailing 5 Years
Trailing 10 Years
6.1%
VIP
CPI+5%
60/40
Global Portfolio
7.6%
VIP
VIP represents the endowment portfolio, formerly known as Willamette Investment Pool (WIP) through 6/30/2021, until investment management was outsourced. It is now called the Villard Investment Pool (VIP).
60/40
The 60/40 benchmark consists of the the weighted average of iShares MSCI ACWI ETF at 60% and iShares Core U.S. Aggregate Bond ETF at 40%, geometrically linked monthly.
Global Portfolio
Beginning as of June 30, 2021, a comparison is shown to the Global Portfolio, a benchmark which initially consisted of 70% equity (iShares MSCI ACWI ETF), 25% fixed income (iShares Core U.S. Aggregate Bond ETF), and 5% cash, geometrically linked monthly and with portfolio weights set as of June 30, 2021 (the inception date). The Global Portfolio is a floating allocation structure and consequently the weights do not rebalance but instead change with the market prices of the underlying securities. As of June 30, 2023, the weights of the Global Portfolio were: 72.0% equities, 23.2% fixed income, and 4.9% cash.
Spending Policy
The amount of university support provided by endowed funds each year is determined according to the Board approved spending policy, currently ~4%. The Foundation's spending policy is at the heart of our prudent management of private gifts. It strikes a balance between the conflicting goals of providing substantial support for current operations and preserving long-term purchasing power.
Environmental, Social, and Governance Factors
Jasper Ridge Partners (JRP), the Foundation's investment managers, employ a comprehensive environmental, social, and governance (ESG) strategy throughout the lifespan of each investment decision. This strategy is embedded within the Foundation's Investment Policy, which is approved by our Board of Trustees' Investment Committee annually and governs the Foundation's investment portfolio.
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The information below is comprised of excerpts from Jasper Ridge Partners' ESG policy.
In 2014, the Foundation was the first Pac-12 institution to establish a policy specific to fossil fuel extraction, and we have committed to making no new direct investments in fossil fuel extraction. Currently, less than 5% of the Foundation’s direct holdings are invested in fossil fuel extraction and all remaining direct investments will expire by 2027.
ESG at Jasper Ridge
Principles
A core part of the JRP ethos is a commitment to acting in the long-term interests of our stakeholders. We believe that environmental, social, and governance (ESG) factors affect investment and business risks and opportunities.
Considerations
ESG considerations relevant to our business and investments are wide-ranging. Examples of factors that we may consider include:
Environmental
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Climate change
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Greenhouse gas emissions
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Natural resource management
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Energy management
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Waste management
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Air and water quality
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Biodiversity
Social
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Diversity, equity, and inclusion
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Civil and human rights
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Health and safety
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Fair wages and benefits
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Labor standards
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Community relations
Governance
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Business ethics and compliance
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Accounting and tax practices
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Transparency
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Board composition and practices
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Data privacy and security
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Political activity
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Shareholder relations
Strategy & Approach
Jasper Ridge aspires to apply their ESG framework both internally, in the way the company is managed, and externally, in the investments made. Through a commitment to responsible business management and investing, they hold the belief that incorporating ESG factors can help to mitigate risk and enhance outcomes.
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ESG considerations can affect the performance of investment portfolios to varying degrees across companies, sectors, religions, asset classes, and through time. Jasper Ridge aims to incorporate ESG considerations throughout an investment's lifespan, from decision-making to post-investment monitoring.
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Beginning in 2022, every new investment presented to our Investment Committee is scored on multiple dimensions, including two ESG-related criteria:
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Investment Impact: How the investment affects environmental, social, and governance factors; this addresses the positive and negative impact of the investment.
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ESG Vulnerability: How environmental, social, and governance factors affect the investment; this addresses business risks and financial returns.