05.002 Investment Policy For Institutional Trust Funds

 Chancellor and the Board of Trustees

Updated August 2024; Established July 2023

 N.C. General Statute 116-36.1, UNC Policy 600.2.4.1

N/A

 Vice Chancellor for Business Affairs

Policy Details:

Policy Details:

1. 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.

2. 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.

3. 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.

4. Policy

   1. 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).

   2. Goals and Objectives

      1. To earn rates of return that consistently exceed the returns of applicable benchmark(s) and generate supplemental resources for the University.

      2. To provide liquidity for University operating and capital needs.

   3. Benchmark

      1. Rate of return on the NC Short-Term Investment Fund managed by the State Treasurer.

         1. 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 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
            U.S. Government Money Market Funds	May not exceed overall exposure threshold		AAA	NA
            NC Short- Term Investment Fund (STIF)	None	None	NA	NA

            *As a percentage of the total balance of all "Institutional Trust and Special Funds."

   4. 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.

   5. 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.

5. 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.

6. 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

   • Heather Iannucci
     Controller 910-962-3144

   • Leslie Hudson
     Debt Services Advisor 910-962-2500