Managed Investment Portfolio - Policy

Printer-friendly version

1. Purpose and Objectives

The objective of this policy is to set out the legal framework determined by Senate and other bodies that govern the management of the University’s investment portfolios.

2. Definitions, Terms, Acronyms

Investments - Arrangements that are undertaken or acquired with the expectation of achieving a financial return through interest, profit or capital growth.

Fund Manager - A person appointed by the University to manage its investment arrangements on its behalf.

3. Policy Scope/Coverage

This policy applies to all investments undertaken by The University of Queensland. It defines the investment powers and any limitations applicable to the University under the Statutory Bodies Financial Arrangements Act 1982.

4. Policy Statement

The University must ensure that there is sufficient liquidity in its investments so that cash is available to meet both planned and unforeseen requirements, and to maximise the return on funds commensurate with a conservative portfolio structure. The controls developed within the policy acknowledge the conservative environment within which the University operates, and the restrictions imposed by the University of Queensland Act 1998, the Financial Accountability Act 2009 and the Statutory Bodies Financial Arrangements Act 1982.

The University may invest funds in accordance with the powers conferred in Part 6 of the Statutory Bodies Financial Arrangements Act 1982.

5. Long Term Investment Portfolio

5.1 General provisions and approvals

The University will invest funds pursuant to the provisions contained within the Statutory Bodies Financial Arrangements Act 1982. Further, the University will not invest funds by any means except those prescribed under Category 3 Investment Powers as per Schedule 5 – Statutory Bodies Financial Arrangements Regulation.

Investments made under this policy must be in Australian currency and undertaken in Australia.

The University may appoint a Funds Manager with the approval of the Treasurer of Queensland.

The Funds Manager may, on the University’s behalf, undertake investments beyond those available under Category 3 Investment Powers.

The Funds Manager will invest funds by means that are legally available to them, including investments in overseas public and private equities and derivative products.

The University will only enter into a derivative transaction in order to hedge against a risk to which it is or will be exposed.

Funds will be invested so as to achieve the most advantageous rate at the time of investment while remaining within prescribed risk management parameters contained within this policy.

The Treasury Unit within FBS will maintain records to show investments have been made in the way most appropriate at the time of investment.

5.2 Portfolio objectives

The University Finance Committee, with endorsement from the UQ Senate Committee, is responsible for determining the broad objectives of the Long-Term Investment Portfolio.

The current objectives of the portfolio are:

  • to earn a long term total return, which should average at least 6% per annum in excess of the average rate of increase in the CPI;
  • to maintain readily realisable assets to meet annual distribution requirements, and to fund any advance commitments to investment funds; and
  • to diversify assets across different asset classes, in order to reduce short-term volatility of total portfolio value.

5.3 Appointment of Funds Manager

The University of Queensland Senate Committee may appoint a Funds Manager/s to manage the Long-Term Investment Portfolio.

The appointment of a Fund Manager/s must be approved by the Treasurer of Queensland.

5.4 Investment assets allocation

The Fund Manager/s are to be issued with guidelines for the management of the portfolio(s) that are consistent with the investment objectives as outlined above, and the University’s authorised investment powers.

Fund management guidelines are to be formulated with the deliberations of the University Finance Committee and are available from the Treasury Unit within FBS.

5.5 Monitoring of Funds Managers

The Fund Manager/s are required to provide, in a timely manner, a quarterly report on the performance of the funds managed, which will include, as a minimum, the following information:

  • the overall performance of the portfolio for the quarter;
  • the performance of each individual manager for the quarter;
  • the asset allocation for the quarter;
  • manager performance vs. targets/objectives;
  • rolling returns of the funds over a given timeframe (ie. since inceptions, 6 month, 1 year, 2 years, etc.);
  • compliance statement with University investment policies and objectives; and
  • recommendations for future actions.

The University of Queensland Finance Committee will meet quarterly to review fund performance. The Fund Manager/s are required to provide comprehensive reports to committee members as requested.

5.6 Use of funds and earnings

The University must periodically distribute the income of portfolio among each of the funds forming the investment portfolio, having regard to the share of each component fund.

If a component fund consists of an amount received for use for a stated purpose and the amount cannot or will not be used for the purpose immediately, income attributable to the share of the amount in the investment common fund may be paid into the general funds of the University if the income is not needed immediately for the stated purpose.

The University may add amounts to or withdraw amounts from the portfolio, without incurring any liability for breach of trust.

The University may add a part of the income of the portfolio to the fund’s capital, subject to terms of the component fund.

The University may use a part of the income to establish or augment another fund to make provision against capital depreciation or reduction of income.

Funds must be used and invested in accordance with the terms stipulated by the original funding source.

Chief Financial Officer Mr Andrew Betts
Chief Financial Officer Mr Andrew Betts