Investment Performance
We are proud to be responsible for protecting, growing and managing sizable investments for the University at Buffalo.
- An endowment that, through the generosity of our donors, currently totals $789 million
- Approximately $235 million in spendable and special reserves, some with investment restrictions
- Approximately $14 million in charitable remainder trust and gift annuity investments, some with investment restrictions
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?
- $141 million supports scholarships, fellowships, student awards and prizes, and general student aid
- $87 million supports chairs and professors
- $121 million supports research
- $199 million supports specific needs of academic units
An increasingly important funding source
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, 2020 (in millions) |
June 30, 2019 (in millions) |
June 30, 2018 (in millions) |
| Endowment Funds | $788.9 | $797.9 | $725.0 |
| Non-Endowed Funds | 259.5 | 268.3 | 301.1 |
| Total | 1,048.4 | 1,066.2 | 1,026.1 |
| Portfolio | June 30, 2020 (in millions) |
June 30, 2019 (in millions) |
June 30, 2018 (in millions) |
| Long Term Portfolio | $1,022.4 | $1,041.8 | $1,000.5 |
| Other Portfolios | 26.0 | 24.4 | 25.6 |
| Total | 1,048.4 | 1,066.2 | 1,026.1 |
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 LTP’s investment strategy uses the “total return” approach for calculating investment returns. The long-term net return objective of the LTP is to maintain the purchasing power of the overall portfolio in order to support at least the annual payout rate (plus the expected rate of inflation as measured by the CPI). The LTP’s return objective is based upon a long-term investment horizon, with an expectation that returns will fluctuate over the interim. While there cannot be complete assurance that the defined objectives will be realized, it is believed that the likelihood of their realization is enhanced through portfolio diversification.
Long Term Portfolio Performance Compared to Benchmarks for Fiscal Year 2020
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 (see Key to Indices).
Total annualized return
Total Annualized Return at June 30, 2020 was as follows:
| 1 Year | 3 Year | 5 Year | 10 Year | |
| Long Term Portfolio | 0.3% | 5.1% | 5.5% | 7.5% |
| Policy Benchmark* | 4.8% | 6.7% | 6.2% | 7.6% |
| CPI + 5% | 5.7% | 6.8% | 6.6% | 6.8% |
20% Russell3000 / 14% MSCI EAFE / 12.5% Blmbg Barc US Aggregate / 12.5% HFRI Fund of Funds Composite Index / 6% MSCI Emerging Markets / 5% NCREIF Townsend Blended Index / 20% Burgiss Global Private Equity Index / 5% Mercer Illiquid Natural Resources Index / 5% Burgiss Senior Debt/Burgiss Mezzanine
U.S. equity return
U.S. Equity Return at June 30, 2020 was as follows:
| 1 Year | 3 Year | 5 Year | |
| Long Term Portfolio | 7.6% | 10.8% | 11.1% |
| Dow Jones US Total | 6.4% | 10.0% | 10.0% |
| S&P 500* | 7.5% | 10.7% | 10.7% |
*Standard and Poors 500 Index
International equity return
International Equity Return at June 30, 2020 was as follows:
| 1 Year | 3 Year | 5 Year | |
| Long Term Portfolio | -5.5% | 0.0% | 2.1% |
| MSCI* AC World ex USA | -4.8% | 1.1% | 2.3% |
*Morgan Stanley Capital International
Fixed income return
Fixed Income Return at June 30, 2020 was as follows:
| 1 Year | 3 Year | 5 Year | |
| Long Term Portfolio | 7.7% | 5.0% | 4.1% |
| Barclays US Aggregate | 8.7% | 5.3% | 4.3% |
Real assets return
Real Assets Return at June 30, 2020 was as follows:
| 1 Year | 3 Year | 5 Year | |
| Long Term Portfolio | -10.5% | 2.8% | 5.9% |
| NCREIF* Townsend Blended | 6.6% | 8.6% | 10.1% |
*National Council of Real Estate Investment Fiduciaries
Hedge funds return
Hedge Funds Return at June 30, 2020 was as follows:
| 1 Year | 3 Year | 5 Year | |
| Long Term Portfolio | -3.6% | 0.8% | 1.1% |
| HFRI* Fund of Funds | 0.1% | 2.1% | 1.4% |
*Hedge Fund Research, Inc.
Private equity return
Private Equity Return at June 30, 2020 was as follows:
| 1 Year | 3 Year | 5 Year | |
| Long Term Portfolio | 4.1% | 11.3% | 10.1% |
| Burgiss Global Private Equity | 18.6% | 16.7% | 13.5% |
Long-term portfolio performance compared to benchmarks
The accompanying chart reflects performance for the Long Term Portfolio in comparison with over 800 other colleges, universities, endowments, and foundations across the country.
Average Annual Compounded Nominal Return Fiscal Years Ended June 30
| Return | NTSE Median | NTSE Rank | |
| 2019 | 5.9% | 5.1% | 33% |
| 2017-2019 | 9.3% | 8.6% | 29% |
| 2015-2019 | 5.8% | 5.1% | 27% |
| 2010-2019 | 8.6% | 8.5% | 45% |
NTSE: NACUBO – TIAA Study of Endowments (over 800 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 allows UBF to honor spending policies, maintain risk tolerance and stability, produce appropriate investment returns, and achieve long-term objectives.
Asset allocation at June 30, 2020 was as follows:
| Manager Type | Long Term Portfolio |
Long Term Target |
| US Equity | 21.5% | 20.0% |
| International Equity | 19.1% | 20.0% |
| Private Debt | 1.0% | 5.0% |
| Private Equity | 18.0% | 20.0% |
| Cash | 3.1% | —– |
| Fixed Income | 13.1% | 12.5% |
| Hedge Funds | 13.7% | 12.5% |
| Real Assets | 10.5% | 10.0% |
| TOTAL | 100.0% | 100.0% |
NOTE: Long-term target is goal for 2022.
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[1], 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.
[1] 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, 2000 invested in the Long Term Portfolio would have been worth $1,086,985 as of June 30, 2020, prior to the Fiscal Year 2021 distribution. In addition, $1,025,002 will be cumulatively distributed for spending needs from Fiscal Year 2002 through Fiscal Year 2021, with annual spending growing from $46,119 in Fiscal Year 2002 to $51,120 in Fiscal Year 2021.