UK Endowment

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The University of Kentucky Endowment ($1.98 Billion as of June 30, 2022) is an aggregation of funds comprised of gifts from donors and grants from the Commonwealth of Kentucky with the requirement that they be invested in perpetuity to generate a reliable and steadily growing reveune stream to support the mission of the University now and in the future. The revenue stream supports scholarships, chairs, professorships, basic research, as well as academic and public service programs, as defined by the individual endowment agreements. The Endowment is expected to provide fiscal stability since the principal is invested for long-term growth and total return spending distributions are generated year after year. 

Learn more about the Investment Committee of the Board of Trustees here

DOWNLOAD THE ENDOWMENT INVESTMENT POLICY FOR MORE INFORMATION. (Updated December 12th, 2022)

 

Financial and Investment Objectives

The Investment Committee has established the following financial and investment objectives for the Endowment:

  1. To preserve the long-term purchasing power of the endowment assets and the related revenue stream over time to evenly allocate support between current and future beneficiaries (intergenerational equity).

  2. To earn an average annual return, after expenses, of at least 7.5% per year over full economic market cycles.

Asset Allocation

Diversification of investments among assets that are not similarly affected by economic, political, or social developments is highly desirable. The general policy shall be to diversify investments so as to provide a balance that will enhance total return, while avoiding undue risk concentrations in any single asset or investment category. To ensure broad diversification, the asset allocation will be set with the following target percentages and within the following ranges:

 

Asset Class Target Range
GLOBAL EQUITY 64% 40-75%
Public Equity 40%  
Private Equity 24%  
GLOBAL FIXED INCOME 12% 5-25%
Public Fixed Income 10%  
Private Credit 2%  
REAL ASSETS 12% 5-20%
Public Real Assets 3%  
Private Real Assets 9%  
DIVERSIFYING STRATEGIES 12% 5-20%

Note: Sub-asset category (e.g., Public Equity) figures reflect working targets. Investment staff has flexibility to adjust sub-asset category exposures within broader, asset category (e.g., Global Equity) ranges, based on market conditions and ongoing research. 

Definitions of the various asset classes that are utilized in the endowment can be found here.

 

Investment Strategies

Within the asset allocation approved by the Investment Committee, the endowment portfolio is invested in strategies managed by external investment firms. Investment staff has been delegated authority by the Investment Committee to evaluate and appoint external investment managers for the endowment. Each investment manager exercises discretion over these assets in accordance with specified investment guidelines. The complete listing of the UK endowment investments as of June 30, 2022 may be found here.

For investment managers interested in contacting the University of Kentucky Investment Office about their strategies, please contact InvestmentManagerResearch@uky.edu.

 

Endowment Performance

*The policy benchmark is a weighted average of various market index returns that are representative of the University's asset allocation. The benchmark has changed over time due to changes in the University's asset allocation, and was most recently updated effective January 1, 2022. Component weights of the policy benchmark are included below: 

40.1% MSCI AC World Index, 20.9% CA Private Equity and Venture Capital Index, 15% HFRI Fund of Funds Diversified Index, 10% Bloomberg US Aggregate Index, 5% CA Natural Resources Index, 4% CA Real Estate Index, 2% CA Subordinated Capital Index, 1% FTSE NAREIT Equity Index, 1% Alerian MLP Index, and 1% Bloomberg US TIPS Index. 

 

 Historical Endowment Values 

 

The Endowment and Sustainability 

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Investment staff recognizes that environmental, social and governance (ESG) considerations are additional lenses that can be utilized to evaluate companies and investment managers. We strive to understand ESG factors and the various ways in which they can be employed, and we monitor how our investment managers incorporate ESG considerations within their organizations and processes, tracking changes over time.

There are multiple investments within the Real Assets portion of the Endowment portfolio that include ESG considerations and fit our requirements for future economic returns. We have also observed a growing awareness and interest from long-standing fund investments in areas such as clean power generation, renewable energy, and sustainable agriculture. 

We regularly meet with investment managers across asset classes who incorporate ESG into their investment approaches and will continue to seek best-in-class asset managers for UK endowment investments.

In 2022, the Endowment researched and supported the launch of a Responsible Investing Student Managed Investment Fund (RI SMIF). This is the third SMIF funded by the UK Endowment and provides interested undergraduate students the experience of managing real dollars in a guided classroom environment with a focus on responsible investing.

 

Breakdown of Total Endowment Assets 


As of June 30, 2022
*Operating Funds include $380M Hospital quasi endowment and $197M University Operating quasi endowment
**Fiduciary Funds include $218M Other Post-Employment Benefits (OPEB) quasi endowment           
                                                                                                                            
As of June 30, 2022
*Fiduciary Funds include $218M Other Post-Employment Benefits (OPEB) quasi endowment
 
As of June 30, 2022
*UK Financial Services includes $218M Other Post-Employment Benefits (OPEB) quasi endowment, $197M University Operating quasi endowment, $22M Medical Malpractice quasi endowment, and other endowments administered by UK Financial Services
**Affiliated corporation

Staff

Eric Monday Executive Vice President for Finance & Administration, Acting Co-Executive Vice President for Health Affairs (859) 257-6231
Todd Shupp Chief Investment Officer (859) 218-3901
Nancy Rohde Investment Director (859) 323-8393
Kristina Goins Investment Operations Analyst (859) 323-4471

Find Us

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The Investment Office is located in suite 310 of the Peterson Service Building on the University of Kentucky’s Lexington campus. The address is 411 South Limestone, Lexington, Kentucky 40508.

For parking needs, the Cornerstone Garage is located just north of the Peterson Service Building. From the Cornerstone Garage, there are two pedestrian bridges at the third level. One connects from the third floor of the garage to the second floor of the Peterson Service Building. The other crosses South Limestone Street and connects to the main campus. 

Endowment Internship Program

The Investment Office offers paid part-time internships to University of Kentucky undergraduate students. Additional information on the program, including application guidance and perspective from former interns, can be found here.