Cambridge University Reporter


Investment management arrangements in the University: Notice

9 January 2006

In March 2004 the Finance Committee established a working group to review the investment management arrangements of the University. The working group has recommended to the Committee that an Investment Board be set up as a committee of the Council; this would replace the Investments Sub-committee of the Finance Committee. This recommendation has been accepted by the Finance Committee and by the Council. The Investment Board has been constituted with the terms of reference set out in the Annex to this Notice.

The working group recommended that the Board should comprise five to six external members and two internal members, with the majority being leading figures from the investment world. The Board membership should be chosen to bring skills and experience in strategic asset allocation, in fund manager selection, and in broad knowledge of asset classes.

The Council have appointed the following initial members of the Investment Board:

Mr Michael Dobson (Chairman), Chief Executive of Schroders plc, M.A., Trinity College,

Mr John Armitage, co-founder and shareholder of Egerton Capital Limited, M.A., Pembroke College,

Mr Damon Buffini, Managing Partner for Europe of Permira, M.A., St John's College,

Mr Charles Larkum, Bursar of Sidney Sussex College, member of the University Finance Committee since 1998, and of the University Investments Sub-committee since 1993,

Mr Douglas McDougall, Chairman of the Finance Committee's Investments Sub-committee for the past five years,

Mr Stewart Newton, Chairman of The Real Return Holdings Company Limited and member of the advisory board of the University's East Asia Institute,

Mr David Swensen, Chief Investment Officer, Yale University,

The Vice-Chancellor (ex officio).

To provide staggered terms for the Board's membership, members have been appointed for terms of between one and four years. The Council intend that a small Investments Office, to be headed by a Chief Investment Officer, be established to be advised and overseen by the Investment Board. The relevant costs of the Investment Office will be charged against the funds under its management.

ANNEX

TERMS OF REFERENCE

Membership

1. There shall be six to eight members of the Board as follows: the Vice-Chancellor; five to seven persons appointed by the Council following consultation with the Finance Committee, one of whom shall be nominated as Chairman.

2. The Chief Investment Officer shall normally be entitled to attend meetings of the Board except when matters concerning the Officer's appointment are being discussed.

3. The University Director of the Finance Division shall normally be entitled to attend meetings of the Board.

4. The Secretary of the Board shall be the University Registrary or a deputy appointed by the Registrary.

5. The Board will meet as required with four or more members constituting a quorum. The Secretary shall normally give not less than two weeks' written notice of a meeting, except that meetings may be called by the Secretary at less notice by agreement with all members. For the purpose of the conduct of the business of the Board, members may participate in meetings by telephone link, video-conference, or other similar arrangements, which permit all members attending to hear and be heard by all other members, and shall count towards the quorum.

6. In the event that the Chairman is absent from a meeting the Board shall elect one of its members to take the chair for that meeting.

7. Only members (as defined in paragraph 1 above) shall be entitled to vote. In the event of an equality of votes, the Chairman shall have a second and casting vote.

Role

The role of the Investment Board is to advise the Council, through its Finance Committee, on matters relating to the University's investments, working closely with the University's Investment Office and with the advice and assistance of appropriate consultants where necessary.

The objectives of the Investment Board are:

(a) to propose and agree with the Council investment objectives and to recommend for agreement by the Council an investment strategy appropriate to those objectives;
(b) to recommend for agreement by the Council asset allocation limits for the funds for which it gives advice and to advise on the appointment of managers for these funds who will operate under instruction from the Chief Investment Officer;
(c) to advise on the operational framework for the role of the Chief Investment Officer and to advise the Vice-Chancellor on the selection, terms, and conditions of the appointment, on the resources and budget necessary to support the Chief Investment Officer's work, and on the evaluation of the performance of the individual appointed to this role against the objectives agreed by the Council;
(d) to monitor the performance of the University's investments against benchmarks to be agreed by the Council on the recommendation of the Board;
(e) to submit an annual report to the Council.

Statements of Investment Objectives and Policies

For each fund or set of investments overseen by the Board, the Council, through its Finance Committee consulting with the Board, will approve a Statement of Investment Objectives and Policies.

Chief Investment Officer

Appointment of the Chief Investment Officer is the formal responsibility of the University and he/she will report to the Vice-Chancellor.

Advisers

The Board is authorized to seek appropriate professional advice inside and outside of the University whenever it considers this necessary.

Administrative support

The University will provide administrative support to the Board, as required.

Meetings

The Investment Board shall meet at least four times each year.