Ohio Administrative Code › Title 3344 - Cleveland State University › Chapter 3344-64 - Investment Fund › Section 3344-64-03 - Investment fund

Current through all regulations passed and filed through July 1, 2024
(A) The university's investment fund will
			 have disciplined investment objectives and consistent management strategies
			 that can accommodate relevant, reasonable, or probable events.
(B) The purpose of this investment policy
			 statement is to establish a clear understanding of the investment objectives of
			 the university's investment fund and will be utilized by the university in
			 monitoring the investment on a continuing basis.
(C) Objectives. The primary objective for the
			 investments of the university's investment fund pool is the preservation of
			 capital while providing for the long-term growth of principal with limited
			 exposure to risk. The objectives shall be accomplished by utilizing a strategy
			 of equities, fixed income, and cash equivalents; in a mix which is conducive to
			 participation in a rising market while allowing for adequate protection in a
			 falling market. The investment manager(s) greatest concern should be total
			 return with consistency of investment performance. Due to the inevitability of
			 short-term market fluctuations, which may cause variations in the investment
			 performance, it is intended that the following objectives will be achieved by
			 the investment manager(s) over three and five year moving periods.
(1) The investment objectives of the plan
			 shall be as follows:
(a) The total return on
			 the assets, net of investment manager fees, shall strive to exceed the consumer
			 price index plus 
										four per cent over a three and five year moving
			 period. In addition, the total return on the assets, net of fees, shall strive
			 to achieve a 
										seven per cent nominal rate of return
			 annually.
(b) The total fund shall
			 be diversified both by asset class (e.g., equities, bonds, multi class
			 investment and cash equivalents) and within equities by economic sector,
			 industry, quality, size, investment style, etc. However, this should not imply
			 that assets must be diversified to the extent required to become an index of
			 either the economy or any stock/bond exchange. The purpose of diversification
			 is to provide reasonable assurance that no single security or class of
			 securities will have a disproportionate impact on the total fund.
(c) The purpose of the fixed income fund
			 (bonds and cash equivalents) is to provide a deflation hedge, to reduce the
			 overall volatility of the fund, and to produce current income in support of the
			 needs of the university.
(d) The
			 fixed income fund should normally represent approximately
			 
										twenty-five per cent to 
										thirty-five per cent of total fund assets at market
			 value, although the actual percentage of fixed income and fixed reserves will
			 fluctuate with market conditions. The committee may change any of the ratios at
			 their discretion, but it is anticipated that such changes will be
			 infrequent.
(e) The purpose of the
			 equity portion is to provide a total return that will simultaneously provide
			 for growth in principal and current income sufficient to support university
			 payment requirements, while at the same time preserve the purchasing power of
			 the fund's assets. It is recognized that the equity fund entails the assumption
			 of greater market variability and risk.
(f) The equity fund should normally represent
			 approximately 
										fifty per cent to sixty per
			 cent of total fund assets at market value, although the actual percentage of
			 equities and equity reserves will vary with market conditions. The committee
			 may change any of the ratios at their discretion, but it is anticipated that
			 such changes will be infrequent.
(g) Multi class investments should normally
			 represent ten per cent of the total fund assets at market value. The actual
			 percentage of multi class investments will vary with market conditions. Multi
			 class investments may include; real estate investments, hedge funds, private
			 equity, managed futures, commodities and other multi class strategies that the
			 finance committee approves. The investments in multi class strategies must be
			 made in a fund of funds investment vehicle registered under the forty's act
			 that is transparent and liquid. A fund of funds approach multi class investing
			 provides broader exposure to the multi class strategy being used allowing for
			 diversification of risk associated with a single investment fund.
(h) Additions to principal shall be allocated
			 by the committee. As a general rule, unless funds are allocated to a balanced
			 manager, new cash will be used to rebalance the total fund in the direction of
			 the 
										fifty-five-thirty-fifteen equity/fixed/multi class
			 investment policy ratio.
(i) Each
			 manager will also be evaluated versus a universe of managers with similar asset
			 mixes and will be expected to consistently rank favorably over three and five
			 year moving periods.
(j) The risk
			 adjusted performance (alpha) for each manager will be expected to be greater
			 that zero over each three and five year moving period.