South Building 205 – Dean’s Conference Room 1:30 p.m. – 3 p.m.
1:30 p.m. Welcome and Introductions
1:35 p.m.
1:40 p.m.
2:20 p.m.
Finance Committee Minutes October 2025 (action item)
Arts and Sciences Foundation, Inc. Budget Review
• FY 2025-2026 Budget Report (3rd Quarter)
• FY 2026-2027 Budget Proposal (action item)
UNC Investment Management Report
2:55 p.m. Closing Remarks and Adjournment
Ken Smith
Ken Smith
Jacob Bacharach
Alison Yerger
Ed Herrington Senior VP and Managing Director
Ken Smith
Arts and Sciences Foundation Board of Directors
Minutes of the Finance and Audit Committees Meeting
October 3, 2025
On Friday, October 3, 2025, the Finance and Audit Committees of the Arts and Sciences Foundation Board of Directors met in the Chancellor’s Conference Room in 105 South Building at 1:30 p.m.
The following directors, staff and guests were present:
Board of Directors
Susan Alesina
Alec McLean
Staff Members
Jacob Bacharach
David Driscoll
Guests
Ken Smith (Chair)
Jim White
Katy Galbraith
Erin Schwie Langston
Jonathon King (UNC Management Company)
Rob Lewis (Balance & Strategy Advisors, CPAs LLP)
Call to Order
Mike Walsh Alison Yerger
The meeting was called to order at 1:30 p.m. by Ken Smith. Mr. Smith introduced Susan Alesina, a new director and member of the committee.
Fiscal Year 2025 Audit Report
The Finance and Audit Committees reviewed the fiscal year 2025 Audit Report for the period ending June 30, 2025. Rob Lewis from Balance & Strategy Advisors presented the audit report.
Balance & Strategy Advisors gave an overview of the Foundation’s financial statements for the periods ending June 30, 2024, and June 30, 2025. They gave the Arts and Sciences Foundation an unmodified opinion, finding that the Foundation’s financial statements for the periods ending June 30, 2024, and June 30, 2025, present fairly, in all material respects. The financial position of the University of North Carolina at Chapel Hill Arts and Sciences Foundation, Inc., and the changes in its net assets and its cash flows for fiscal years 2024 and 2025 ended in accordance with accounting principles generally accepted in the United States of America.
Some key points include an investment return of 11.6% for FY25 and 12.6% for FY24. The mortgage has a refinance interest rate of 2% and matures in 09/2032. The pre-payment penalty has expired. Expenses have increased mainly in support of the College.
The Finance Committee voted to recommend the approval of the Audit Report for FY25 ending June 30, 2025, to the full board during the plenary session.
Approval of the Minutes
The Finance and Audit Committees approved the minutes from the Finance and Audit Committees meeting held on April 24, 2025.
Fiscal Year 2025 Budget Report and Summary (Fourth Quarter)
The Finance Committee reviewed the FY25 budget report as of June 30, 2025. Jacob Bacharach, senior associate dean of operations and strategy, reported on the FY25 budget report for the period that ended June 30, 2025
For the period ending June 30, 2025, total revenue was $8,442,483 and total expenses were $7,952,127.
Revenue Highlights Include:
Arts and Sciences Fund contributions, as of June 30, 2025, totaled $2,374,930, exceeding the fiscal year goal.
Endowment Administration Fee (EAF) maintained the same rates as the previous years: 60 basis points to the College of Arts and Sciences (owning unit), 20 basis points to University Development, and 20 basis points to the OneCarolina Development Investment Fund, which is directed to support University Development. Due to a slight improvement in fiscal year 2024 market performance, the EAF distribution increased by 1.63% over the previous year’s allocation.
University Interest Income earnings were 26.2% higher than the budgeted amount. There was a FY24 investment income allocation that was misallocated and posted late to the ledger in August 2024 in the amount of $14,159.12.
Truist Money Market/Investment Income – The Arts and Sciences Foundation continues to maintain a checking and money market account with Truist Bank, although most of the balances are held within treasury bills or high-yield money markets.
To maintain short-term earnings alongside low-risk liquidity, the Foundation purchased $4.5 million in treasuries using the balances held within the Truist Bank money market account in January 2024. In August and November 2024, the Foundation redeemed the second and third treasury bills at $1.25 million and $2.5 million, respectively. With these redemptions, the Foundation purchased additional bills and invested $205,377 into the Lighthouse Group’s money market account with a 5.10% rate for additional liquidity. There were additional redemptions in January 2025 and February 2025. This account generated $73,689 in investment/interest income in FY24 and $198,435 in FY25. During
each redemption period, the Foundation assessed cash liquidity needs prior to purchasing additional treasuries.
Gains in the Truist investment account were not previously reported in the budget for FY24 or FY25. Those gains have now been reflected in the FY25 final budget increasing the FY25 Beginning Balance by $73,689 (carried over from the FY24 Year-End Balance) and increasing the Total Revenue for FY25 by another $198,435 in investment/interest income. Moving forward, gains will be reflected in the budget.
Expense Highlights Include:
Personnel costs are under budget for the year due to ongoing efforts to hire additional staff as well as hiring restrictions from the UNC system office. In June 2024, the Foundation contracted with WittKieffer, a search firm, to recruit a senior director of development. There have been numerous personnel actions over the course of the fiscal year. Since the April 2025 board meeting, a director of development started in May and a senior director of development and assistant vice president started in June. A temporary donor relations and communications specialist position was also filled in June.
During FY24, the state of North Carolina passed a budget that included a 3% raise for all state employees, effective 7/1/24, which was implemented during the first quarter.
Travel is below budget for the fiscal year, as the Foundation had multiple vacant development officer positions during the year. However, travel increased significantly in the fourth quarter, as some of these positions were filled and recent hires began to travel more for donor meetings. We expect donor travel to increase even further in FY26, as the Foundation continues to onboard and hire new development officers.
Building Debt Service, Building Maintenance, Communications and Postage and Insurance are at or below expected levels.
Legal/accounting expenses exceeded budget. These costs and fees include payments for the audit, the 990 preparation costs, state registration fees and the annual charge from the University for the associated entities agreement, which covers support from central accounting services. The University has charged $14,000 for the associated entity services. Though outside counsel fees were included in the budget, we exceeded the anticipated expenses for FY25. This line also includes ad hoc costs for miscellaneous outside counsel.
Office supplies/equipment are above expected levels. In June 2024, the Foundation upgraded several computers; these expenses hit in July 2024. A new AV system was installed in the Buchan House boardroom.
Other services/miscellaneous expenses are over budget. This category includes subscription services used for prospect research; broadcast emails and stewardship of top
donors; professional development opportunities for employees; and Truist banking fees. University Development no longer absorbs the 3% credit card transaction fee, so this unbudgeted expense comprises a significant portion of the increased expense. (Note, the 3% credit card transaction fee is included in the FY26 budget.) Spending in this category, overall, remained relatively consistent in the fourth quarter, with respect to previous quarters of the fiscal year.
The Dean’s Discretionary Grant is allocated at the end of each fiscal year and comes from unrestricted contributions to the Arts and Sciences Fund. We allocated the entire amount raised to the Dean’s Discretionary Fund.
Fiscal Year 2026 Operating Budget as of September 30, 2025 (First Quarter)
Mr. Bacharach presented the Foundation’s operating budget performance through the first quarter of fiscal year 2026 (ending September 30, 2025).
Revenue Highlights:
The Arts and Sciences Fund raised $268,358 toward a $2.4 million goal from 793 revenue donors as of September 29, 2025.
Endowment Administration Fee maintained the same rates as previous years: 60 basis points to the College of Arts and Sciences (owning unit), 20 basis points to University Development and 20 basis points to the One Carolina Development Investment Fund. The net revenue distribution for FY26 reflects a $521,114 increase over fiscal year 2025 (FY25).
Truist Money Market/Investment Income
The Arts and Sciences Foundation continues to maintain a checking and money market account with Truist Bank, though the majority of the balances with Truist are held within the money market account.
To maintain short-term earnings alongside low-risk liquidity, the Foundation purchased a $2.615 million treasury using the balances held under the Truist Bank money market account in January 2024. In August 2025, it was redeemed with $32,922.85 in earnings. Most funds in Truist are sitting in a high-interest earning money market.
Expense Highlights:
Personnel is under budget for the first quarter due to the need to fill vacant and new positions within the Foundation. The Foundation has hired additional staff during the first half of FY26. These filled positions include a donor relations coordinator, an assistant director of annual giving, an annual giving intern, an associate director of development, and a senior director of development and assistant vice president. The state of North Carolina has not passed a budget bill for FY26, and there are limitations to the HR actions that are being approved.
Travel is below budget for the first quarter as the Foundation continues to hire development officers. We expect donor travel to increase as we progress through FY26 and as the Foundation continues to onboard and hire new development officers.
Building Debt Service, Legal/Accounting and Special Events/Entertainment are either at or below budget.
Office Supplies/Equipment is close to budget for the year given more significant purchases in the first quarter. Two new pod units and three laptop desks were installed in the garden level in the first quarter.
Communications and Postage Expenses are slightly above budget. The Foundation has an MOU with University Development to share the cost of Salesforce, which is used as a marketing tool. The Foundation’s portion is $7,500, and this charge hit during the first quarter. Some communications expenses expected for FY25 were incurred in the first quarter of FY26.
Building Maintenance is expected to be right above budget for the first quarter. Recently, a contractor removed several damaged trees around Buchan House and the parking lot. Costs are also planned for safety and ADA accessibility improvements and security enhancements for all external doors.
Other Services/Miscellaneous is ahead of budget due to the Arts and Sciences Foundation staff retreats that were held during August and September 2025. Remaining expenses for the year should stay within the overall budget.
Insurance is at higher levels than past years given new credit card fees and small increases in annual premiums. The FY26 director’s and officer’s liability insurance was paid in full during the first quarter. Crime insurance will be paid during the second quarter.
The Dean’s Discretionary Grant (A&S Fund) is allocated at the end of each fiscal year and comes from unrestricted contributions to the Arts and Sciences Fund. This year, we anticipate allocating the entire amount raised to the Dean’s Discretionary Fund.
UNC Investment Management Report
The Finance Committee reviewed the performance of the UNC Management Company. Jon King, president and CIO of the UNC Management Company, presented the performance report for the UNC Investment Fund (UNCIF).
The Fund’s primary objective is to maintain the purchasing power of its underlying funds after accounting for spending distributions and inflation over the long term. Annualized returns in excess of approximately +8.0 percent are deemed to have achieved this target.
The most important and difficult challenge remains striking the proper balance between upside participation and downside protection.
The UNC Investment Fund returned +11.6% for FY25. UNCIF is off to a great start in FY26 returning +5.2% for the first two months of the year.
UNCIF has produced 9.7%+ annualized returns and top decile performance over the medium- and long-term. The Fund’s +9.7% 10-year return (top decile (1)) beats SIPP’s +7.9%.
UNCIF is a top performer relative to peers for CYTD 1-, 5-, and 7-year periods with its returns exceeding 10% for all periods.
The stock market sets new highs as the risks recede. Global conflicts continue but do not seem to affect the stock market, the federal chair remains in place and tariffs do not materialize. The economy continues to prosper despite policy uncertainty with a stable unemployment rate of 4.2% and cooling inflation.
UNCIF remains exceptionally strong across time periods (through August 31, 2025).
The committee presented Mr. King with a gift of appreciation for his excellent leadership of the UNC Management Company, and shared best wishes for his impending retirement.
Adjournment
With no other discussion needed, the meeting adjourned at 2:45 p.m.
Projected Beginning Balance
UNC-CH Arts and Sciences Foundation, Inc. Fiscal Year 2027 Proposed Budget
2026-2027 Proposed Budget
Projected Ending Balance
THE ARTS AND SCIENCES FOUNDATION, INC.
PROPOSED 2026-2027 OPERATING BUDGET
The Foundation’s budget request for fiscal year 2026-2027 (FY27) reflects an overall increase from the approved budget for FY26. This is attributable to significant hiring and an upcoming Universitywide capital campaign
Among budget highlights:
• This budget incorporates the projected beginning balance for FY27 and includes prior-year balances.
• The FY27 revenue goal for the Arts and Sciences Fund will increase to $2.5 million.
• The FY27 endowment administrative fee is projected to increase by 5%.
• The administrative fee breakdown shows the full fee charged to each unit, less the 20 basis points allocated to University Development and the 20 basis points allocated to OneCarolina, which supports University Development. The net amount reflects the 60 basis points that fund the Foundation. The funding model for the upcoming campaign has not been finalized at this time.
• Anticipated University interest income and Truist investment income are estimated at $170,982. Most balances held at Truist are in a high-interest-earning money market fund. The most recent monthly return (for March 2026) was $13,063.78 (or a 0.2651% gain for that month–extrapolated as a 3.4791% APR for a full year).
• Personnel costs show an increase over FY26, as the organization continues to grow leading up to the new campaign.
• Non-personnel expenditures will increase to account for additional costs detailed below most notably an increase in travel to account for the larger development team
Revenue:
Arts and Sciences Fund
The FY27 revenue goal for the Arts and Sciences Fund will increase to $2.5 million. The Foundation expects to transfer the full amount to support the Dean’s discretionary grant.
Endowment Administration Fee (EAF)
We anticipate that the FY27 EAF distribution will maintain the same rates as previous years: 60 basis points to the College of Arts and Sciences (owning unit), 20 basis points to University Development, and 20 basis points to the OneCarolina Development Investment Fund, which supports University Development. We are conservatively estimating a 5% increase, or $317,934, in net revenue distribution for FY27.
The Arts and Sciences Foundation anticipates starting the fiscal year with roughly $6 95 million in balances across accounts at Truist bank and the University
University Interest Income
We are estimating $4,000 in University Interest Income for FY27.
Truist Money Market/Investment Income
In the first quarter of FY27, we expect to transfer $200,000 out of our Truist investment account to be used to pay for significant renovations of Buchan House. We anticipate small earnings in the Truist money market account. We conservatively estimate $166,297 in interest, based on a money market rate of 3.48 percent.
Expenses:
Personnel – The FY27 budget reflects an increase The Foundation has budgeted for organizational growth that includes additional frontline fundraiser positions and increased operational and donor relations support. The increase in staffing will position the Foundation to raise additional funds in the upcoming campaign. We anticipate scaling the organization’s workforce by adding six to eight positions in FY27 beyond our FY26 peak-staffing levels. Note that this plan includes converting an existing intern position to a full-time position. Additionally, several positions at the Foundation are funded, in part, through funds outside of the Foundation.
Travel – We anticipate significant increases in travel expenses during FY27, given the growth of the development team. The proposed travel budget reflects the peak travel levels of FY19 with an additional 5 percent increase over FY19 expenses corresponding to inflation and rising costs across all travel categories.
Building Debt Service – This is the debt service on Buchan House, and this cost remains the same during FY27.
Special Events/ Entertainment – This budget includes both Foundation board meetings, two Dean’s Arts and Sciences Leadership Council meetings, regional events, and other donor gatherings. While we project this category will likely finish FY26 a little under budget, we anticipate that planned events for FY27 will bump expenses back up to the anticipated FY26 level. Accordingly, we have kept the FY27 budget flat with respect to FY26.
Communications and Postage – This category includes postage charges for development, donor stewardship, and annual giving solicitation costs. Stewardship and donor relations focuses on donor stewardship and endowment reports, major and principal gift proposals, donor acknowledgments, and producing custom solicitation materials. We project finishing FY26 a little under budget in this category, and we have reduced the FY27 budget accordingly.
Building Maintenance – This category includes operating maintenance for Buchan House. For improved facility management and unexpected occurrences, we maintain larger balances for unforeseen events. The Foundation will continue to scale with the upcoming capital campaign. To optimize space for our growing workforce, there are renovation plans for Buchan House to increase offices, workstations, and conference rooms over the current capacity. Based on recent quotes of close to $200,000, we have earmarked $100,000 in this budget category for expenses for these renovations to take place in FY27. We are estimating to spend the other $100,000 of this renovation on capital improvements to the property. (This second $100,000 would come from the Foundation’s Buchan House source (C5277), which is outside of this budget.)
Legal/Accounting – The FY27 proposed budget includes auditing and tax preparation fees, annual state solicitation renewals, and the annual charge from the University for the associated entities operating agreement which covers support from central Accounting Services. The associated entities operating agreement will be renewed in FY27 and there may be an increase to the annual fee of $14,000. The Foundation will continue the contract with Copilevitz, Lam & Raney, P.C. in processing the state solicitation renewal forms. We expect to finish FY26 over budget for legal expenses. We also anticipate increases in legal expenses in FY27 over what was budgeted for FY26; thus, we have increased the FY27 budget for this category.
Office Supplies/Equipment – Primary expenses are for general office supplies and computers/printers. We project exceeding our budget for FY26. We have increased the FY27 budget in this category to be more consistent with FY26 spending levels which includes supplying computer equipment for new hires as the organization continues to grow.
Other Services/Miscellaneous – This category includes the budget for prospect management research tools and staff professional development as well as employee engagement activities. We project to finish FY26 under budget. We have reduced the FY27 budget for this category to reflect FY26 spending levels.
Insurance – Due to the anticipated annual increase in insurance premiums, as well as the addition of a new cyber security insurance policy, we have increased the insurance budget for FY27 by a small amount.
The Dean’s discretionary grant (Arts and Sciences Fund) is made at the end of each fiscal year and comes from unrestricted contributions to the Arts and Sciences Fund. For FY27, we anticipate allocating the entire amount raised to the Dean’s discretionary fund.
UNC Investment Fund, LLC
Presentation to: Arts & Sciences Foundation
Ed Hetherington: Sr. VP & Sr. Managing Director, UNC Management Company
April 16, 2026
Confidentiality Notice
These materials contain confidential information and may include trade secrets as defined in Section 66-152(3) of the North Carolina General Statutes. For that reason, no part of these materials may be reproduced, distributed, transmitted, displayed or published without prior written consent of UNC Management Company, Inc.
CY 2025 Performance (12 months)
Strong absolute and relative performance
UNC Investment Fund (“UNCIF” or “Fund”)
returned +18.5% for CY 2025(1)
Relative to Benchmarks:
Outperforms SIPP (+13.7%) by a wide margin
Outperforms traditional Global 70/30 Portfolio(2) (+17.7%)
‒ Global equities were extremely strong for the year but UNCIF’s Private Equity and Long/Short Equity allocations topped their performance
Exceptional performance from Private Equity (+28.4%) and Long/Short Equity allocations (+23.3%)
Relative Performance Drivers:
and
Financial
Markets Summary: CY 2025 (12 months)
Global equity markets provided a strong tail wind
is for CY 2025: January 1, 2025 to December 31, 2025 (12 months)
Public Equity Markets: CY 2025 Highlights
Equity markets up by double-digits worldwide
Global equities (MSCI ACWI) returned +22.3%
‒ Liberation Day a distant memory as stock markets race to make new all -time highs
EM on top with all regions contributing positively
‒ ‘Bazooka’ stimulus and home-grown AI breakthroughs propelled Chinese markets to highs not seen since 2021
‒ Taiwan and South Korea remained core AI beneficiaries, while LatAm was propelled by a combination of political shifts and strong commodity prices
EAFE finally overtook the U.S.
‒ Liberation Day prompted investors to aggressively diversify internationally
US Markets: Concentrated Risk and Return
Largest 10 Stocks Drove 50% of S&P 500 Index Return
Emerging Markets: Concentrated Risk and Return
Top 10 Stocks (of 1,196) Drove 45% of MSCI EM’s CY 2025 Return
US Markets: Speculative Bets Performed Well
Note: Data from April 8, 2025 to December 31, 2025
UNCIF Asset Class Returns: CY 2025 (12 months)
Return Summary
Relative Long-Term Performance
Fund has achieved its return objective across time periods
Diversification & private investments required: a traditional equity/bond portfolio fails to meet its objective
Note: Annualized performance for periods ended December 31, 2025
UNCIF Asset Class Returns: 10 years
UNCIF Positioning Relative to SIPP
As of February 28, 2026
Significant overweight to Private Equity remains Underweight to Public Portfolio
Private Equity: 11.7% overweight
Public Equity: aggregate 3.1% underweight (Long + Long/Short Equity)
Other Public: 6.0% underweight (Div. Strat., Fixed Income, Cash)
Public Portfolio: CY 2025 Highlights
Long/Short Equity still on top
Long/Short Equity returned +23.3%, easily beating its benchmark’s +16.9% return
- Outperformance was broad with 5 managers up by more than +30%
- 11 of 12 managers delivered a positive return
Public Diversifying Strategies returned +13.1%, nearly double its benchmark’s +7.4% return
- Performance was broad-based, with all 7 quant managers positive for the period and 5 up by double digits
- Both global macro managers posted 20%+ returns
Long Equity returned +15.4%, underperforming its benchmark’s +22.3% return
- Domestic, Developed International, EM, and Global buckets all up by double-digits but reduced China exposure and poor performance of quality stocks led to underperformance 3 of 4 Public Portfolio asset
UNCIF Hedge Fund Performance
Long/Short Equity Managers
Public Diversifying Strategies Managers
is for CY 2025: January 1, 2025 to December 31, 2025 (12 months)
Long/Short Equity
Strong performer across time periods
Long/Short Equity is UNCIF’S top performing public asset class across all periods:
Outperformed HFRI benchmark across all periods by several hundred basis points
Outperformed global equities (MSCI ACWI) over 7 years with lower volatility
Note: Annualized performance for periods ending December 31, 2025
Long/Short Equity – Downside Protection
During the past five years, UNCIF’s Long/Short Equity portfolio:
Provided significant downside protection in down months
Outperformed its HFRI benchmark by 2.5% annually
Nearly met the MSCI ACWI equity index and captured over 70% of S&P 500 total return
5 Years Ended December 31, 2025 (all 60 months)
Diversifying Strategies
Diversified exposure to underlying risk factors
Discretionary Macro is largest exposure due to strong performance, but Equity Market Neutral (EMN) is catching up due to combination of strong performance and new allocations
– Discretionary macro managers differ in market focus, length of investment, and implementation leading to each being relatively uncorrelated to the others
– Quant managers differ in research philosophies, investment horizons, risk controls, and levels of leverage
Diversifying Strategies has become increasingly diversified across underlying return drivers
While many strategies use leverage, underlying diversification alleviates risk of individual strategies
Note: As of December 31, 2025
Public Diversifying Strategies
Annualized Returns
Public Diversifying Strategies portfolio has generated strong returns that have increased with its buildout and diversification
Note:
Public Diversifying Strategies – Downside Protection
During the past five years, UNCIF’s Public Diversifying Strategies portfolio:
Generated a net positive return in periods of declining equity markets
Outperformed its HFRI benchmark by nearly 4.0% annually
5 Years Ended December 31, 2025 22 Down Months (cumulative return)
Public Diversifying Strategies – Uncorrelated Returns
Rolling 3-Year Correlation and Returns
Note: Data from August 31, 2003 to December 31, 2025 While decreasing
Diversifying Strategies’ Role in
UNCIF
Capital protection during equity market drawdowns
Public Diversifying Strategies returned -1.0% and -1.0% cumulatively in Q4 2018 and Q1 2020, respectively
– Compared to S&P 500 Index’s -13.5% and -19.6% returns
Public Diversifying Strategies returned +15.2% in CY 2022 vs. -18.1% for the S&P 500 Index
Provided stable returns during 2025 “tariff tantrum”
Underlying manager returns varied significantly demonstrating the importance of diversification and a balanced strategy mix
Diversifying Strategies has consistently provided downside protection in periods of equity market weakness
Long Equity: CY 2025
Double-digit performance across all 4 sub-asset classes
Long Equity returned +15.4%, trailing +22.3% for benchmark (MSCI ACWI) Factor-exposed strategies underperformed - Overweight to quality in EAFE and India and consumer in EM and drove underperformance
to India and consumer
Underweight to value sectors like financials and defense and overweight to quality hurt performance
Long Equity underperformance driven by factor tilts and idiosyncratic managers
International
Quality
Stocks
Underperformed by Most in 8 Years MSCI EAFE Quality Outperformance of MSCI EAFE Over Rolling 3 Years
US PE transactions rebounded in 2025, with volume rising by 27% and deal count by 6% YoY
Fundraising remains challenged, with many LPs constrained by liquidity
IPO activity showed signs of recovery in H2 2025 and is expected to accelerate in 2026, led by anticipated listings from high-profile late-stage venture companies
Buyout & Growth Equity (“BO”)
BO outperformed in the short term while remaining in line with long-term benchmark
Distributions exceeded capital calls in 2025 with selective commitments to funds, co-investments, and continuation vehicles (“CVs”) funded by exits of mature, high-quality assets
Venture Capital (“VC”)
Strong manager selection and targeted industry allocations continue to drive outperformance
UNCIF managers selectively target best-in-class opportunities across stages, with a growing emphasis on artificial intelligence
Private Equity continues to outpace benchmarks while generating liquidity from mature holdings
Private Portfolio: Real Assets
Mixed recovery amid commodity supply pressure
Real Asset Markets
Real estate valuations and activity stabilized in 2025, aided by alternative sectors such as data centers, though the recovery is constrained by low institutional allocations and limited core capital
In 2025, energy markets diverged as Brent crude oil prices fell ~15% YoY while natural gas prices rose ~60% YoY, highlighting contrasting supply-demand dynamics and elevated volatility
Ongoing geopolitical tensions, including uncertainty around Venezuelan production, sanctions, and broader Middle East conflicts, added to commodity price volatility and market risk
Real Estate (“RE”)
While short-term performance aligned with the benchmark, stabilized valuations and disciplined property-type allocation contributed to outperformance over the long-term
Re-investments with high performing managers, combined with selective commitments to new opportunities, led to increased activity diversified across multiple property types in H2 2025
Energy & Natural Resources (“ENR”)
Production-driven dividends, asset sales, in-kind share distributions, and sales of publicly listed equities drove positive net cash flow in CY 2025
UNCIF continues to make selective commitments with long-term partners
Private Portfolio: Annual Cash Flow
Private Portfolio: 10-Year Performance
Outpacing benchmark with strong manager selection
Outperformance across all asset classes highlighted by Venture Capital and Real Estate
Performance Update: FYTD 2026(1)
Fiscal Year 2026 is shaping up to be an extraordinary year
UNCIF off to a great start in FY 2026 returning +21.0% for the first eight months of the fiscal year
UNCIF returned +9.9% through December 31, 2025 (6 months)
UNCIF returned +10.2% in January 2026, its highest monthly return since inception
An incredible success story: UNCIF’s indirect exposure to a private company was adjusted upward in January to reflect company’s latest valuation resulting in an aggregate valuation increase of ~ $1.2 billion for UNCIF’s exposure
(1) FYTD 2026: July 1, 2025 to February 28, 2026 (8 months)
Wrap-Up
CY 2025: Very strong performance, FYTD 2026(1): An extraordinary start!
Supported by global equities, UNCIF returned +18.5% for CY 2025…
…and with exposure to a private company providing an extremely strong tailwind, UNCIF has returned +21.0% for FYTD 2026
As of December 31, the Fund’s 5-, 7- and 10-year returns:
- Exceed +10.7% annualized
- Beat SIPP by > ~2% annually
- Significantly beat the Global 70/30 Portfolio(2) - Top decile relative to peers(3)
UNCIF has achieved its primary return objective across time periods (while the Global 70/30 Portfolio has not)
As market uncertainty persists, we maintain our disciplined approach and long-term focus
Appendix: Current Market Environment
U.S. Economic Outlook: Uncertainty Reigns
Wide range of possible outcomes as Iran war scrambles the outlook
Economic vital signs healthy for now with February 2026 CPI
YoY at 2.4% and unemployment rate stable at 4.4%, but…
…U.S. war with Iran looms large
Growth is stalling…
− U.S. economic growth slowed to a crawl of 0.7% annualized in Q4, revised downward from 1.4%, driven by cooldown in consumer spending and 43-day partial government shutdown
− Consumer sentiment contracted 6% month-over-month to March
− Betting markets put the latest probability of a recession in 2026 at 37%(2), up nearly 2x from low of 21%(2) as recently as February
…right as inflation threatens to rise
− Average U.S. gas price topped $4/gallon for the first time in 3 years
− 1-year inflation expectations at 3.8%(1), up from 3.4%(1) one month ago, the biggest one month increase since April 2025
Stock Markets Fall as Iran War Takes Center Stage…
20% of world’s oil and LNG supply at risk in worst disruption in history
‒ Oil traffic through Strait of Hormuz has dropped from 20 million barrels to 1 million barrels/day, with only Iran-approved ships passing through
‒ Saudi Arabia, UAE, Kuwait, and Iraq have collectively cut production by over 10 million barrels/day due to lack of storage and export routes
‒ Analysts say oil could hit $200/bbl if closure persists for 6-8 more weeks(1)
Supply shock increases stagflation risk and puts central banks in a bind
‒ 30% of global urea (fertilizer) flows through the Strait, directly feeding into food inflation and increasing the risk of food insecurity
‒ Permanent infrastructure damage, such as that which took out 17% of Qatar LNG production capacity for up to 5 years, means energy prices will be structurally higher for longer
‒ Financial markets went from pricing in 0 ECB hikes to as many as three, while U.S. Fed went from 2 projected rate cuts to 0
Trump oscillates between declaring victory, lauding progress on negotiations, and threatening to “obliterate” Iran
‒ Options for escalation could include securing the Strait of Hormuz or seizing Kharg Island, which accounts for 90% of Iran’s oil exports, with 10,000 additional U.S. troops on the ground
‒ Iran’s 440.9 kg stockpile of 60% enriched uranium still outstanding and likely beyond the reach of U.S. bunker-buster bombs
…While Broader Risks Remain
Trump skirts Supreme Court ruling to get his way on tariffs
‒ Trump bypassed the Supreme Court’s 6-3 strike-down of “reciprocal” tariffs with a 150-day “balance of payments” duty, which keeps the U.S. effective tariff rate at 10.5%, the highest since 1943
‒ Even upon expiry in July, the effective tariff rate is projected to remain at 7.3%, the highest since 1967
‒ All eyes will be on Trump’s visit to China scheduled for May 14-15
Though focus remains on the Iran war, other conflicts continue to simmer
‒ Russia-Ukraine war drags on with Trump temporarily removing sanctions on Russia to alleviate energy crisis stemming from war with Iran
‒ U.S. capture of Venezuelan strongman Nicolás Maduro the clearest sign yet of the ‘Donroe Doctrine’s’ reorientation of foreign policy, with Cuba potentially the next domino to fall
‒ Humanitarian crisis in Cuba hitting a breaking point with daily blackouts and a total collapse of fuel and food distribution networks
U.S. market concentrated on AI, but capex shows no signs of slowing down
‒ Index concentration is at an all-time high and several valuation measures are one or more standard deviations above historical means
‒ AI darlings still vulnerable to bad news surrounding supply, demand, and competition
Starting Jan. 1971
or 70s Redux?
Starting Dec. 2018
As inflation approaches Fed’s target, will they continue to cut rates…or is Powell scared of being the next Arthur Burns?
Note: Data through February 28, 2026
S&P 500 Forward P/E Ratio
S&P 500 is still expensive relative to history, but uncertainty is beginning to weigh on valuations
Note: Data from June 1, 1990 through March 31, 2025
Note: Data through March 31, 2026
AI Drives Massive Investment
Hyperscaler Capex as % of Op. CF
AI has driven capital expenditures to new heights and comprises a large portion of hyperscaler cash flow
Source: FactSet; hyperscalers include Alphabet, Amazon, Meta and Microsoft
AI Leading to Revenue Growth without Employees
# of Employees vs. Revenue
Since 2022, largest companies have grown revenue while head count has flatlined - a tangible impact of AI
Note: Data through December 31, 2025; Mag 7 ex. Tesla includes Alphabet, Amazon, Apple, Meta, Microsoft, and Nvidia
Relative Pricing within Markets Imbalanced
Note: Data through March 31, 2026
Iran War The Largest Energy Shock In History
Suez Crisis (1956-57) Arab Oil Embargo (1973)
Iran Revolution (197879) Gulf War (1990-91) Iran War (2026-)
Supply disrupted Spare capacity available (% of world)
Supply shock due to the Iran war estimated at over 12 million barrels per day, 3x larger than that of the 1970s crises
Source: Rapidan Energy Group
Iran War The Largest Energy Shock In History
Strait of Hormuz YTD Arrivals of Ships
Note: Data from January 1, 2026 through March
Source: PortWatch
Iran War The Largest Energy Shock In History
Strait of Hormuz YTD Arrivals of Ships: 7-Day Moving Average
Source: PortWatch War Starts
Shipping traffic through the Strait of Hormuz has fallen by 97% since the start of the conflict
Note: Data from January 1, 2026 through March 31, 2026
Iran War The Largest Energy Shock In History
Brent Crude % Price Change From 30 Days Before Wars Started
War Starts
Note: Data through March 31, 2026
Trading Days Since War Started
Gulf War Russia-Ukraine War Iran War
on February 28
Iran War The Largest Energy Shock In History
Note: Data through March 31, 2026
S&P 500 Performance Through Geopolitical Shocks
Iran War Changes the Equation for the Fed
2/27/26 Implied Cuts
3/31/26 Implied Cuts
Financial markets have gone from pricing in 2-3 cuts before the war to 0 now
Note: Data through March 31, 2026
Appendix: Other
Public Equity Markets: CY 2025 Highlights
Non-US Equities Outperform
After years of U.S. outperformance, non-U.S. equities pulled ahead in CY 2025, aided by the dollar’s decline
UNCIF Sector Over/Underweights Hurt Performance
Sector Weights as of 12/31/25
U.S. Dominates Longer Term due to EPS Growth
10-year total return with change in multiple and EPS While
Emerging Markets Performance CY 2025
India and Consumer Detracted
UNCIF Emerging Markets: Overweight India + Consumer
Weights as of 12/31/25
Private Portfolio: Unfunded Commitments
Unfunded commitments as a % of UNCIF’s AUM over past 10 years
Unfunded commitments within the target range at 12% of UNCIF’s AUM
Data rolled forward as of December 31, 2025
Resumed Fed Cuts
U.S. Treasury Yield Curve
12/31/2024
12/31/2025
As the Fed has cut, the front end and belly of the curve have dropped but the back end has refused to budge
UNCIF Long/Short Equity Exposure: Gross and
Note: Data from August 31, 2003 to December 31, 2025
UNCIF Long/Short Equity: Cumulative Returns
Note: Data from August 31, 2003 to December 31, 2025
