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Office Of The Chief Investment Officer Of The Regents 2017/2018
Investing for the Long Term
2016/2017
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201 7 /201 8 2016/2017 2 UC Investments Way 1. Less is More 2. - - PowerPoint PPT Presentation
201 7 /201 8 2016/2017 2 UC Investments Way 1. Less is More 2. - - PowerPoint PPT Presentation
Office Of The Chief Investment Officer Of The Regents Investing for the Long Term 201 7 /201 8 2016/2017 2 UC Investments Way 1. Less is More 2. Risk Rules 3. Concentrate 4. Creativity 5. Build Pays Knowledge 6. Team Up 7. What makes
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- 6. Team Up
- 7. What makes
UC, UC
- 8. Perfect
Alignment
- 9. Man Meets
Machine
- 10. Centennial
Performance
UC Investments Way
- 1. Less is More
- 2. Risk Rules
- 3. Concentrate
- 4. Creativity
Pays
- 5. Build
Knowledge
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UC Investments $118.4 Billion
$118.4B
UC Investments
$23.8B Retirement Savings $6.4B Short Term $11.5B Endowment $9.2B Total Return $66.6B Pension $0.9B Captive Insurance
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10 UC Campuses 5 Medical Centers 3 National Labs $82 Billion UC Cash Flows Annually $300 Million Annual Premiums 26 coverages 233,000 Pension Plan Members 312,000 UC Savers
UC Investments 6 Unique Products
Serving 265,000 Students with 5,400 Funds
Endowment Total Return Short Term Captive Insurance Pension Retirement Savings
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Our Products Where We Invest
United Kingdom – 3.0% $3.6B United States – 73.6% $87.1B Latin America – 0.9% $1.1B Canada – 2.3% $2.7B Emerging Europe, Middle East, Africa – 1.8% $2.1B Developed Europe ex-UK – 6.7% $7.9B China – 2.1% $2.5B India – 1.0% $1.2B Japan – 3.5% $4.1B Emerging Asia – 3.2% $3.8B Developed Asia ex-Japan – 1.9% $2.3B
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How We Invest $118.4 Billion
As of December 31, 2017
Percentage (%) 60.2 50.8 Public Equity 36.7 31.0 Fixed Income Market Value in Billions ($) Total 6.4 $118.4 Billion 100.0% Cash 5.4 Real Estate 3.5 3.0 Other Investments 15.1 12.8 Private Equity 4.0 3.4 Absolute Return 6.4 5.4 Real Assets 1.2 1.0
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UC Investments 26 Investment Professionals
13 26 5 6 6 7 Investment Professionals Operations Risk Treasury Investment Fellows Support
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UC Investments $4.5 Billion Managed Per Investment Professional
$1.1B
Industry
$4.5B
UC Investments
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UC Investments 120 Partners
120 150 195 240
2014 2015 2016 2017
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UC Investments $230 Million Saved in Fees Over 3 Years
$70M $27M $124M $230M $9M
Endowment Retirement Savings Total Return Pension UC Investments
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UC Investments 0.027% Office of CIO Costs
1% 10% 100% 0.3% 0.027%
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UC Investments $2.2 Billion of Value Added Over 3 Years
$2.2B $1.5B $0.4B $0.3B
Working Capital Endowment Pension UC Investments
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Partner with our stakeholders to set realistic expectations Manage products differently based on their risk and return objectives Implement asset and risk allocation for all products Add value through active and passive management Aggressively reduce costs in a low return environment Win from our competitive advantages
- Size. Scale. Patience. The UC.
Create opportunities through innovation and collaboration
How We Add Value
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$118.4 Billion
Assets
$2.2 Billion
Value Added 3 Year
0.027%
Cost Office of CIO
$230 Million
Saved
- ver 3 years
120
Partners
6
Unique Products
$4.5 Billion
per Investment Professional
+15.1%
Endowment 2016/2017
+14.5%
Pension 2016/2017
UC Investments
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UC endowment.
ENDOWMENT
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Total UCSB Endowment of $337.7 Miilion UCSB Foundation Assets $197.4 Million UCSB Regents Assets $140.3 Million A collection of more than 450 endowments
ENDOWMENT
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$10.8B $0.7B $0.2B $11.5B ($0.2B)
Market Value in Billions ($) June 30, 2017 Market Gains Value Added Net Cash Flow December 31, 2017
UC Endowment 2017/2018
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Economic Growth Foreign Exchange Emerging Markets 78% 3% 2% Residual 17%
5.9% Volatility
Public Equity Liquidity Absolute Return Private Equity Real Estate (Real Assets) Real Assets Cash 45% 12% 17% 10% 4% 2% 10%
$11.5 Billion
UC Endowment Asset Allocation Risk Allocation
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As of December 31, 2017
Endowment $11.5 Billion 100.0% 100.0% Cash 1.1 9.5 0.0 0.0 9.5 Real Estate (Real Assets) 0.5 3.9 7.5 (3.6) Other Investments 3.9 33.7 45.0 45.0 (11.3) Private Equity 1.2 10.1 11.5 (1.4) Absolute Return 2.0 17.5 23.0 (5.5) Real Assets 0.2 2.2 3.0 (0.8) 5.2 45.0 42.5 42.5 2.5 Public Equity 1. 1.3 11.8 12.5 12.5 (0.7) Liquidity (Income) Portfolio Weight (%) Policy Weight (%) Overweight / (Underweight) Market Value in Billions ($)
UC Endowment Asset Allocation
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Endowment $11.5 Billion 100.0% 100.0% Long Term Policy Weight (%) 5.2 45.0 30.0 30.0 Public Equity Cash 1.1 9.5 0.0 0.0 Real Estate (Real Assets) 0.5 3.9 12.5 Other Investments 3.9 33.7 60.0 60.0 Private Equity 1.2 10.1 22.5 Absolute Return 2.0 17.5 25.0 1. 1.3 11.8 10.0 10.0 Liquidity (Income) Real Assets 0.2 2.2 Where we are headed Where we are as of December 31, 2017 Market Value Portfolio in Billions ($) Weight (%)
UC Endowment Asset Allocation
Allowable Ranges Minimum Maximum 20.0 0.0 0.0 0.0 28.0 10.0 15.0 0.0 52.5 0.0 0.0 82.0 32.5 32.0 17.5 3.0 17.5
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9% 12% 6% 15% 3% 5 Year 10 Year 20 Year 0% As of December 31, 2017 3 Year 1 Year 7.1% 6.6 0.5 5.8% 5.2 0.6 9.5% 8.2 1.3 7.5% 0.4 7.1 Net Returns Difference over Policy Benchmark Policy Benchmark
UC Endowment Investing for the Long Term
15.6 6 Months 7.7 6.7% (1.0) (1.0) 14.6%
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$118.4 Billion
Assets
$2.2 Billion
Value Added 3 Year
0.027%
Cost Office of CIO
$230 Million
Saved
- ver 3 years
120
Partners
6
Unique Products
$4.5 Billion
per Investment Professional
+15.1%
Endowment 2016/2017
+14.5%
Pension 2016/2017
UC Investments
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