A Message from the Foundation’s Investment Office
Mar 26, 2020 04:40 PM
As we navigate a challenging and global health crisis with possibly large and negative financial and economic impacts, the Foundation’s Investment Office would like to reiterate some of our guiding principles:
- We are long-term investors: in fact, the endowment is a perpetuity that benefits from a much longer lens than most individual investors. This is especially helpful today.
- The last bear market ended 11 years ago on March 9, 2009. After so many good years, investors may have forgotten what a bear market is like. We have not.
- We understand that all markets are cyclical and believe that volatility is to investors what air turbulence is to pilots. It is a part of the landscape.
- We were prepared for the current volatility with sufficient liquidity to meet our current and future obligations to our University partners.
- We have positioned the endowment to weather the extreme market conditions and, more important, to take advantage of new opportunities that may arise from the current period of extreme dislocation.
- We manage a global, well-diversified endowment portfolio composed of many asset classes that can help mitigate major declines in stocks and higher risk securities.
- The Foundation’s Spending Policy is geared to high predictability and designed to lessen the impact of dramatic market swings on our annual distribution to University budgets.
- We partner with investment managers who understand what it means to be good fiduciaries in good times and bad: who share our desire to compound capital over the long-term and make sound decisions under duress.
- Our governance, portfolio structure, liquidity planning and decision-making rigor all support a strong endowment program.
- Finally, with its 150-year history, the University of Illinois has navigated many difficult moments in the past and we as an institution and an endowment will manage through the current challenges.