2013-2014
Endowment Report
Investment Committee (As of June 30, 2014)
Richard H. Parry, Chair President Tom Johnson Investment Management, LLC Robert J. Ross, Vice Chair President & CEO Inasmuch Foundation MEMBERS
Dennis J. Dougherty President Intersouth Partners Tricia L. Everest Counsel Gable Gotwals Michael Gardner Managing Member, Baytree Capital NY Baytree Capital Associates Gary B. Homsey Attorney Homsey Law Center FOUNDATION LIAISON
Bill Junk President Oklahoma United Methodist Foundation STANDING MEMBERS Robert Henry President, OCU
Ron Norick OCU Board of Trustees Chair
The Princeton Review recently joined U.S. News & World Report, Kiplinger, and Forbes in recognizing Oklahoma City University’s prominent regional stature and the value of our exceptional education. I am deeply grateful for the extraordinary generosity of our many donors who make these accolades and our great work at OCU possible. Philanthropy is an outgrowth of appreciation for our University. As you will see in this report, gifts of all sizes are making an increasingly significant difference for OCU. We must continue this momentum in the coming years to ensure the University is more accessible and an even better place for our students to learn and rise to their fullest potential. Those who choose to invest in the University’s continuing success with gifts toward endowment are providing a margin of excellence for our people and programs, today and in the future. The legacy of our donors will impact OCU in perpetuity, forming the foundation to provide our students the quality education they deserve for generations to come. I have great optimism for the future and what we will continue to build together. Best regards,
ROBERT HENRY PRESIDENT, OKLAHOMA CITY UNIVERSITY
Guiding Investments Oklahoma City University strives to be a good steward of its endowed gifts and follows a prudent management philosophy in investing them. These funds are invested to maximize total return and meet income needs, while managing the level of risk by effectively diversifying investments among different asset classes and securities. The Board of Trustees has adopted the strategy of investing endowment assets not only to meet immediate needs but to preserve the long-range purchasing power of the endowments in order to provide support in perpetuity for the programs the endowments were created to benefit. The long-term investment goal for the endowment is to achieve an annualized total return (net of fees and expenses) through appreciation and income of at least five percent, plus the rate of inflation as measured by the broad, domestic Consumer Price Index. Thus, gifted funds maintain their value in real, inflation-adjusted terms over time. An Investment Committee sets policy regarding the investment of endowment and other university assets. The Committee, working with the Oklahoma United Methodist Foundation and Wespath Investment Management, monitors the management of endowed funds and regularly reviews the investment policy. Any revisions to the policy must be approved by a majority vote of the Investment Committee, subject to ratification by the Board of Trustees.
Asset Allocation Asset allocation for the endowment is consistent with the investment objectives and risk tolerances expressed in the investment policy adopted by the Board of Trustees. This policy, developed after examining the historical relationships of risk and return among asset classes, is intended to provide the highest probability of meeting or exceeding the fund’s return objectives at the lowest level of risk.
BROAD ASSET ALLOCATIONS OCU ENDOWMENT • $60.6 MILLION
Alternatives • 6.5% Equities • 56.4% Fixed Income • 37.1%
DETAIL ASSET ALLOCATIONS OCU ENDOWMENT • $60.6 MILLION
Alternative Investments • 4.7%
International Equity Fund • 21.4% U.S. Equity Fund • 35.0%
Fixed Income Fund • 21.3%
Inflation Protection Fund • 8.4% Notes Receivable • 5.7% Mineral Interests • 1.8% Cash • 1.7%
Spending Policy The amount available each year from the endowment for scholarships, faculty support and other related spending is established by the Board of Trustees. The current policy calls for quarterly distributions of 5% (on an annualized basis) of the ending market value for each month in the quarter.
OCU Endowment Funds: A Legacy with Impact INVESTMENT PERFORMANCE NET OF FEES • AS OF JUNE 30, 2014 OCU Endowment Lipper Median 35% S&P 500 Index / 20% MSCI EAFE Index / 45% BC US Aggregate Intermediate Index
18
1 .72 .78 .6 15 15 14
8 1 6 .9 .4 .5 13 13 12
5 91 8 5 7.6 8. 8.
9 .4 .30 .01 10 12 11
2 Years
3 Years
5 Years
15 12 PERCENTAGE
As of June 30, 2014, OCU’s directly managed investments consisted of 514 separate endowments. During fiscal year 2014, OCU received $1,412,998 in new endowment gifts. The total market value of the consolidated endowment accounts on June 30, 2014, was $60,571,810, a net increase of $6,542,337 over the previous year’s total. Strengthened giving and positive investment performance were the main drivers of asset growth. As the market value of OCU’s endowment continues to grow, benefits to the institution and its students will increase proportionately. The primary objective of the invested funds is to generate an increasing stream of income to meet the rising costs of education for our students while maintaining the purchasing power of the individual endowments over time. The graph to the right represents the investment performance of the funds overseen by the OCU Board of Trustees over a five-year period.
9 6 3 0
1 Year
ASSETS AND DISTRIBUTIONS Assets Under Management
This report highlights those funds directly managed by OCU trustees through the Oklahoma United Methodist Foundation – $60,571,810 at the end of fiscal year 2014. Additional endowed funds for the benefit of OCU bring the overall endowment total to more than $92,000,000. Many important university priorities could not be met without the financial support of endowment funds. Programs supported by endowment distributions include scholarships, professorships, chairs, facilities maintenance and construction, and the work of various departments. OCU is fortunate to have received, and continue to receive, endowment gifts that create a lasting legacy, both for donors and the institution. Such generosity will have a resounding impact for generations to come.
65
3.0
60
2.8
55
2.6
50
2.4
45
2.2
40
2.0
35
2010
2011
2012
2013
2014
1.8
MILLIONS OF DOLLARS
MILLIONS OF DOLLARS
Distributions from Assets Under Management
The historical returns presented herein represent the actual historical returns of the OCU Endowment which reflect the deduction of fees charged by third parties. Lipper Median returns are from the Lipper mutual fund universe for balanced funds in the asset class category. As of 7/9/14, the universe consisted of 3,707 peers. Source: Wilshire Associates and Lipper. The information in this document was obtained from sources believed to be reliable, however, accuracy is not guaranteed. Historical returns are not indicative of future performance.
Cash, securities or planned gifts are excellent ways to build an existing endowment or establish a new fund. For additional information, please contact the Office of Advancement and External Relations at 405.208.7000 or visit okcu.edu/give. Marty O’Gwynn VP for Advancement and External Relations mlogwynn@okcu.edu Elizabeth Sheppard, CFRE Assistant VP for Development easheppard@okcu.edu Dale Ross Planned Giving Specialist dross@okcu.edu