Assets of The UCLA Foundation are managed by the UCLA Investment Company, a wholly owned subsidiary of The UCLA Foundation. For more information, please visit www.uclainvestmentcompany.org.
Performance Highlights - For the fiscal year ended June 30, 2013 (FY12-13):
Endowed pool return: 15.2%
Net position, comprised of total assets in excess of total liabilities, increased by $221 million: $2 billion (a 13% increase)
Total assets: $2.2 billion (a 12% increase)
Total liabilities: $251 million (a 9% increase)
Revenue in the form of donor contributions: $253 million (a 47% increase)*
Gift fund distributions (a 14% increase): ($235.2 million)
Operating loss (due to decreased contribution revenue combined with increased campus support and external charitable distributions) compared to FY11-12’s operating loss of ($54.1) million (a loss decrease of $53 million): ($1.1 million)
Non-operating income (due to positive investment returns) vs. a non-operating loss in FY12 of ($24.8) million: $185.5 million
Other income from private gifts of permanent endowments: $53.6 million (a 10% increase)
Total FY12-13 endowment payout available to the campus and affiliated entities: $75.4 million (a $1.7 million increase)
Annual payout to the campus continues to grow, consistent with The UCLA Foundation’s goal to provide predictable, sustainable payout that preserves equity among generations.
*Excludes contributions managed by The Regents, additions to permanently endowed funds and endowed or conditional pledges.
The purpose of The UCLA Foundation's endowment is to support the educational mission of the University of California, Los Angeles by providing a reliable source of funds for current and future use. The income/payout from each individual endowment fund is used to support the purpose established by the donor in the gift instrument. However, endowment funds are commingled for investment purposes in The UCLA Foundation Endowment Pool to maximize returns and minimize investment and administrative costs.
The endowment seeks to maximize long-term total returns consistent with prudent levels of risk. Investment returns are expected to preserve or enhance the real value of the endowment to provide adequate funds to sufficiently support designated University activities. The Endowment assets have an indefinite time horizon that runs concurrent with the endurance of the University in perpetuity. As such, the investment portfolio assumes a time horizon that may extend beyond a normal market cycle and therefore may assume an appropriate level of risk as measured by the standard deviation of annual returns. It is expected that professional management and portfolio diversification will smooth volatility and assure a reasonable consistency of return. The endowment's portfolio is expected to generate a total annualized rate of return, net of fees and spending, that is greater than the rate of inflation as measured by the National Consumer Price Index over a rolling 5-year period. The UCLA Foundation accomplishes these objectives by engaging a number of professional managers who are assigned specific investment mandates for equities, fixed income and alternative investments.
The Foundation's spending policy governs the rate at which funds are released to fund holders for current spending. The Foundation's spending policy is based on a target rate set as a percentage of a rolling market value. The current rate is 5.0 percent for fiscal year 2013-14. The Board of Directors of The UCLA Foundation reviews and approves this rate annually. Investment returns earned in excess of the approved spending rate are retained in the endowment principal to protect from the effects of inflation and to allow for growth. During periods of investment market decline, endowment distributions for newer funds may, if needed, reduce the fund value to assure that predictable funding is available for individual endowed fund program activities and objectives.