The purpose of this policy is to provide guidelines for the investment of Institutional Trust Funds of the University of North Carolina at Wilmington's (“UNCW” or “the University”).
Authority:
Chancellor and the Board of Trustees
History
Established July 2023
Source of Authority:
N.C. General Statute 116-36.1, UNC Policy 600.2.4.1
Related Links:
N/A
Responsible Office:
Vice Chancellor for Business Affairs
Policy Details:
Policy Details:
Purpose
N.C. General Statute 116-36.1 authorizes the Board of Governors of the University of North Carolina ("UNC") to adopt uniform policies and procedures applicable to the deposit, investment, and administration of institutional trust funds and to delegate such authority through the President to the constituent institutions. Through UNC policy "600.2.4.1: Delegated Authority for Managing Institutional Trust Funds," upon request by the Chancellor, the President may delegate authority to the Chancellor of a constituent institution to deposit, invest, and administer institutional trust funds consistent with N.C. General Statute 116-36.1.
The purpose of this policy is to provide guidelines for the investment of Institutional Trust Funds of the University of North Carolina at Wilmington's (“UNCW” or “the University”).
This policy will delegate management responsibility for the execution of this investment policy; establish overall portfolio goals and objectives; identify applicable benchmarks, and identify permitted investment securities/funds along with applicable investment limits.
Scope
This policy applies to the University’s Institutional Trust Funds only (i.e. funds generated by fees, auxiliary receipts, and overhead receipts). It does not apply to any General funds.
Roles and Responsibilities
Authority to manage the investment program in accordance with this investment policy is granted to the University's Vice Chancellor for Business Affairs, who shall act and may further delegate the authority to execute and manage investments in accordance with any procedures and internal controls for the operation of the investment program consistent with this investment policy.
Policy
Philosophy
The University and its associated entities rely on operating cash to fund operations, pay debt service, and build rainy day funds. Therefore, an investment program for operating funds must rely on prudent, conservative methods of preserving cash while generating supplemental returns. In this investment policy we seek to maintain the highest credit quality instruments, while limiting duration, sector, and counterparty risk. Limiting duration helps to reduce interest rate risk – the likelihood that movements in interest rates will affect the net asset value of investments in the program. While a substantial portion of UNCW's operating cash will remain invested with the NC Short-Term Investment Fund (STIF) managed by the State Treasurer, there may be opportunities to generate additional income for UNCW (with minimal to no additional risk being incurred by the University).
Goals and Objectives
To earn rates of return that consistently exceed the returns of applicable benchmark(s) and generate supplemental resources for the University.
To provide liquidity for University operating and capital needs.
Benchmark
Rate of return on the NC Short-Term Investment Fund managed by the State Treasurer.
Permitted Investments and Applicable Limits
Permitted investments and applicable limitations are outlined in the following chart:
Permitted investments and applicable limits
Investment Type
Individual Investment / Placement Limit
Exposure Threshold
Quality
Maximum Limit / Reset Period
U.S. Treasury Bills, Notes, and Bonds
May not exceed overall sector exposure threshold
Combined (may not exceed 50% of Institutional Trust Funds)*
Full Faith & Credit of the United States
Up to 24 months
Bank Certificates of Deposit
Under FDIC insurance limit
FDIC Insured
Up to 24 months
NC Short- Term Investment Fund (STIF)
None
None
NA
NA
*As a percentage of the total balance of all "Institutional Trust and Special Funds."
Custody
All investment securities and funds managed by external parties will be held in the name of the University by an independent third-party custodian selected by the University.
Reports and Updates
This policy will be reviewed on a regular basis and a report will be prepared for the Board of Trustees annually that provides investment results and recommendations for any potential updates to the policy.
Compliance and Enforcement
The Division of Business Affairs will enforce and administer this policy in accordance with the N. C. General Statutes. The policy administrator is the Vice Chancellor for Business Affairs.
Contacts for Additional Information and Reporting
Miles Lackey Vice Chancellor for Business Affairs 910-962-3383
Jennifer Leung Associate Vice Chancellor for Finance 910-962-3227
