Financial Information

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Investment Performance

We are proud to be responsible for protecting, growing and managing sizable investments for the University at Buffalo.

These funds, which have grown substantially in recent years under our stewardship, include:
  • An endowment that, through the generosity of our donors, currently totals $971 million
  • Approximately $245 million in spendable and special reserves, some with investment restrictions
  • Approximately $16 million in charitable remainder trust and gift annuity investments, some with investment restrictions

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Providing reliable returns

Our goal—which we consistently achieve—is to control risks while generating resources from the total investment portfolio, which ensures a reliable return on these funds. This provides UB with a predictable and substantial source of revenue, allowing UB to fulfill its mission.

What does the endowment support?

The endowment—which consists primarily of funds donated for UB through the years—is managed by the UB Foundation in accordance with each donor’s wishes. As of June 30, 2023:
  • $182 million supports scholarships, fellowships, student awards and prizes, and general student aid
  • $117 million supports chairs and professors
  • $143 million supports research
  • $250 million supports specific needs of academic units

An increasingly important funding source

A strong endowment ensures a certain level of financial stability for UB, an institution that is expected to last in perpetuity. We are committed to helping grow the endowment for the betterment of the university. In keeping with best practices, only the returns on the principal are made available for spending; the endowment principal is protected and invested in order to ensure the buying power stays consistent over the years.

Investment performance and policies

The portfolio and its Management

The market value for total investments of the University at Buffalo Foundation and Affiliates (UBF) can be summarized as follows:

Type of fund June 30, 2023 (in millions) June 30, 2022
(in millions)		 June 30, 2021
(in millions)
Endowment Funds $971.0 $907.9 $1,020.1
Non-Endowed Funds 289.9 266.2 313.7
Total $1,260.9 $1,174.1 $1,333.8

 

Portfolio June 30, 2023 (in millions) June 30, 2022
(in millions)		 June 30, 2021
(in millions)
Long Term Portfolio $1,227.1 $1,147.5 $1,294.7
Other Portfolios 33.8 26.6 39.1
Total $1,260.9 $1,174.1 $1,333.8

These funds are managed under the supervision of UBF’s board investment committee.  More than eighty professional investment firms currently share in the administration of the portfolios.

​Long Term Portfolio (LTP) Investment Objectives

The primary investment objective is to preserve the inflation-adjusted purchasing power of the LTP, including the endowment.  LTP’s investment strategy uses the “total return” approach for calculating investment returns.  Investment performance is most appropriately reviewed over the longer term, with an expectation that returns will fluctuate over the interim.  It is recognized the investment objective can only be achieved while assuming risk levels commensurate with market volatility.

Long Term Portfolio Performance Compared to Benchmarks for Fiscal Year 2023

Investment performance, on a total return basis net of fees, is most appropriately reviewed over the longer term with benchmarking to proper indices.  Policy Benchmark returns are average returns of indices weighted consistent with portfolio allocation.

IN THIS SECTION:
Total Annualized Return

Total Annualized Return at June 30, 2023 was as follows:

  1 Year 3 Year 5 Year 10 Year
Long Term Portfolio 8.9% 9.4% 6.8% 7.3%
Policy Benchmark[1] 9.3% 6.9% 6.3% 6.8%
CPI-U[2] +5% 8.0% 10.8% 8.9% 7.1%

[1] Policy Benchmark: (07/01/2021 – Present) 40% Morgan Stanley Capital International ACWI (N), 10% Bloomberg 3-10 Year Treasury Bond Index, 18% Hedge Fund Research Asset Weighted Composite Index, 30% Custom Private Benchmark and 2% BofA ML 91-Day T-Bills

[2] CPI-U: Consumer Price Index For All Urban Consumers

MSCI: Morgan Stanley Capital International

EAFE: Europe, Australia, Far East

HFRI: Hedge Fund Research, Inc

Total Global Equity Return

Total Global Equity Return at June 30, 2023 was as follows:

  1 Year 3 Year 5 Year
Long Term Portfolio 15.9% 10.7% 7.5%
MSCI* ACWI (N) 16.5% 11.0% 8.1%

*Morgan Stanley Capital International

Fixed Income Return

Fixed Income Return at June 30, 2023 was as follows:

  1 Year 3 Year 5 Year
Long Term Portfolio -0.5% -2.3% 1.5%
Bloomberg 3-10 Year Treasury  -1.8% -4.1% 0.7%

 

Hedge Funds Return

Hedge Funds Return at June 30, 2023 was as follows:

  1 Year 3 Year 5 Year
Long Term Portfolio  7.3%  6.8% 3.5%
HFRI Asset Weighted Composite Index   0.0% 6.3%  3.4%

 

Private Equity Investment Return

Private Equity* Return at June 30, 2023 was as follows:

  1 Year 3 Year 5 Year
Long Term Portfolio 5.4% 22.0% 13.7%
mPME3 Total Portfolio Blend 18.5% 17.7% 11.8%

*Final results

3 mPME: Public Market Equivalent

Long Term Portfolio Performance Compared to Benchmarks for Fiscal Years 2014-2023

The accompanying chart reflects performance for the LTP in comparison with over 660 other colleges, universities, endowments, and foundations across the country.

Average Annual Compounded Nominal Return Fiscal Years Ended June 30

  Return NTSE Median NTSE4 Rank
2023 8.9% 8.0% 39%
2021-2023  9.4%   9.1%  45%
2019-2023  6.8%   6.8%  50%
2014-2023  7.3%   7.1%  43%

4 NTSE:         NACUBO – TIAA Study of Endowments (over 700 colleges and universities)
NACUBO:   National Association of College and University Business Officers

Asset allocation policy

The proper and prudent distribution of investments among various asset classes offers a high probability of achieving the Foundation’s investment objectives commensurate with acceptable risk levels.

Asset allocation at June 30, 2023 was as follows:

  Manager Type Long Term
Portfolio		 Long Term
Target
Global Equity 43.6% 40.0%
Private Investments 26.7% 30.0%
Cash and Others 3.0% 2.0%
Fixed Income 9.6% 10.0%
Hedge Funds 17.1% 18.0%
TOTAL 100.0% 100.0%

NOTE: Long-term target is goal for 2023.

Spending policy

Spending is defined as funds made available annually from the LTP for university programs and administrative expenses.

Spending on university programs will be approximately 4% of the donor’s entire original contribution after the first full year of participation in the LTP.  Afterwards, spending will increase annually at the average rate of inflation, regardless of market performance.  This approach provides a stable and predictable annual stream of funds for use that maintains its purchasing power over time.

The Spending Rate will be determined and approved annually by the Investment Committee.  The desired result is to achieve a year-to-year spending increase for individual funds that approximates the Inflation Rate[5], not to exceed 3%.

Total spending dollars are limited to a floor of 4% and a ceiling of 6% of the three-year average market value of the LTP, measured on a quarterly basis.  Special spending rules are followed for individual endowments where the value has fallen below historic dollar value of original gift.

[5] Inflation Rate is the average of the Higher Education Price Index (HEPI) and the Consumer Price Index (CPI) for the most recent three calendar years.

Long Term Portfolio Performance

A $1,000,000 gift on June 30, 2003 invested in the LTP would have been worth $1,574,733 as of June 30, 2023, prior to the Fiscal Year 2024 distribution. In addition, $1,257,884 will be cumulatively distributed for spending needs from Fiscal Year 2005 through Fiscal Year 2024, with annual spending growing from $63,048 in Fiscal Year 2005 to $67,995 in Fiscal Year 2024.