AnnuAl EndowmEnt REpoRt
Fiscal Year Ended June 30, 2010
Compiled by the Office of the Treasurer of The Regents
University of California, Berkeley Foundation
UC Davis Foundation
The University of California, Irvine Foundation
The UCLA Foundation
University of California, Merced Foundation
UC Riverside Foundation
U.C. San Diego Foundation
University of California, San Francisco Foundation
UC Santa Barbara Foundation
U.C. Santa Cruz Foundation
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
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univERsity of CAlifoRniA AnnuAl EndowmEnt REpoRt
Table of Contents
Introduction 4
I. Total University Endowment Assets 6
Table 1: Total University Endowment Assets by Donor Designation
Table 2: Total Managed Endowment Assets by Foundation
II. Managed Endowment Funds by Asset Class 8
Table 3: Allocation of Managed Endowment Funds by Asset Class
III. Endowment Fund Investment Performance 9
Table 4: Average Annualized Total Returns
IV. Endowment Fund Investment Management 10
Table 5: Foundation Endowment Assets by Investment Manager
V. Endowment Fund Investment Management Fees 11
Table 6: Endowment Management Fees by Foundation
VI. Gift Fees and Recurring Charges 12
Table 7: Gift Fees and Recurring Charges by Regents and Foundation
VII. Endowment Spending Policies 13
Table 8: Endowment Spending Policies by Regents and Foundation
VIII. Total Foundation Gift Assets 14
Table 9: Total Foundation Gift Assets by Campus
IX. Individual Foundation Reports 15
Berkeley 16
Davis 18
Irvine 20
Los Angeles 22
Merced 26
Riverside 28
San Diego 30
San Francisco 32
Santa Barbara 34
Santa Cruz 36
General Endowment Pool (GEP) 38
XI. 10-Year Historical Performance
Table 10: 10-Year Historical Investment Performance 42
Table 11: 10-Year Historical Benchmark Performance 43
VI. Supplemental 44
XII. Investment Policies 46
XIII. Glossary 48
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UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
BACKGROUND
The history of reporting total
University and Foundation
endowments dates back to
October 1978 when The Regents’
Committee on Educational Policy
adopted a policy for University
Support Groups. In subsequent
years, The Regents charged the
Treasurer’s Office with obtaining
pertinent information regarding
the UC Foundations’ investments
and presenting an annual report
to The Regents. The annual
report includes the investment
philosophy, policies and
performance of each Foundation’s
endowment assets, as well as
those of The Regents’ endowment
assets.
PURPOSE
The Regents’ policy on Support Groups articulates the permissible activities
by affiliated fund-raising organizations to be:
“Gifts to a University Support Group for the benefit of the
University may be accepted and administered only in accordance
with University policies and, except as otherwise specified in
this policy, may not be invested as endowments and shall be
transferred to the University in an expeditious manner to fulfill
the intentions of the donor for allocation and disbursement by
the University.”
The Treasurer’s Office is the designated recipient and investment
manager of The Regents’ endowment assets.
However, in October 1978, The Regents included an exception in this
policy for Foundations only that states:
“A Campus Foundation may hold and invest endowments
and funds functioning as endowments on a long-term basis.
Such investments must be consistent with the terms of the
gift instrument. Investment operations shall be conducted in
accordance with prudent, sound practices to insure that gift
assets are protected and enhanced and that a reasonable return is
achieved, and with due regard for the fiduciary responsibilities of
the Foundation’s governing board….”
As a result of the above exception, donors can designate either The
Regents or the Campus Foundations as the recipient of their gift assets.
Foundations may then choose The Regents (the Treasurer’s Office) and/
or external investment managers to manage their endowment investments.
The Treasurer’s Office acts as a resource to the Foundations and offers
its investment management services and counsel on endowment fund
management issues. This report’s goal is to provide The Regents with a
comprehensive overview of all of the University’s endowment assets.
univERsity of CAlifoRniA AnnuAl EndowmEnt REpoRt
Introduction
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UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
Introduction
DATA SOURCES
State Street Bank is the University’s official “book of record” and calculates
performance of the General Endowment Pool (GEP) supplemented with data
from the University of California Office of the President’s (UCOP) Endowment
and Investment Accounting office. Annual Foundation performance results
in this document prior to 2006 were provided by each Foundation and were
neither audited nor calculated by the Treasurer’s Office or State Street Bank.
Returns for 2006 and later were provided by State Street Bank, except in
extraordinary circumstances. On a quarterly basis, State Street Bank reports
Foundation performance to The Regents and those quarterly reports serve as
official “book of record” to The Regents. Policy benchmark composition was
provided by the Foundations. All annual benchmark returns used in this
report were calculated by The Regents’ Investment Consultant, Mercer, LLC.
Each Foundation supplied a copy of its audited annual financial report. For
the purpose of reporting investment performance, each Foundation received
the same exhibit formats and guidance, and any inconsistencies in definition
and reporting are noted in the charts, tables and discussion.
The Cambridge Associates Endowment Pool Median cannot be reproduced or
redistributed without the express written consent of Cambridge Associates LLC.
PERFORMANCE PRESENTATION
This report focuses primarily on the Foundations’ endowment assets and
their investment performance. Section IX—Individual Foundation Reports—
displays endowed assets by investment manager. Totals for non-endowed assets
and pledges are provided in Section VIII—Total Foundation Gift Assets. The
glossary at the end of this report includes definitions for these asset categories.
PERFORMANCE COMPARISONS
General Endowment Pool: The General Endowment Pool (GEP), established in
1933 and unitized in 1958, is The Regents’ primary investment vehicle for
endowed gift funds. GEP is a balanced portfolio of equities, fixed-income
securities and alternative investments in which all Regental endowment
funds participate, unless payout needs require otherwise. The GEP’s return
is based on unit value.
Cambridge Endowment Pool Median: Cambridge Associates measures returns on
148 college and university endowment pools in its endowment study.
Benchmark: For details regarding each individual Foundation’s benchmark, see
sections IX and XII.
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I
I. Total University Endowment Assets
Table 1 outlines the University’s total endowment assets by donor designation to either The Regents for the benefit of the
campus or to the campus Foundation.
Overall, total endowment assets increased by 12.3% over the last fiscal year, with The Regents’ endowment assets
increasing by 10.2% and Foundation endowment assets increasing by 15.8%. These changes incorporate both new gifts
accepted during the fiscal year and the return on total endowed assets.
The Treasurer’s Office also manages endowment assets of almost $1.1 billion for the benefit of systemwide programs and
administration, including education and research programs, support services and administration. These assets appear in
the table as part of The Regents’ endowment assets.
* Includes GEP, STIP, and separately invested assets, as well as annuity and life income funds. Excludes security lending balances and other accounts receivable and payable.
Table 1
Total University Endowment Assets by Donor Designation
to Regents and Foundation
(Excluding Pledges)
(Market Value $000)
June 30, 2010 June 30, 2009
Campus Regents* Foundation Total Regents* Foundation Total
Berkeley $1,704,527 $895,456 $2,599,983 $1,559,033 $785,758 $2,344,791
Davis 435,081 162,569 597,650 401,579 137,198 538,777
Irvine 50,213 191,147 241,360 45,167 161,036 206,203
Los Angeles 1,102,732 1,058,679 2,161,411 982,212 898,838 1,881,050
Merced 17,791 5,080 22,871 16,251 4,339 20,590
Riverside 37,261 72,771 110,032 32,456 62,692 95,148
San Diego 161,026 316,728 477,754 148,969 282,748 431,717
San Francisco 743,411 510,030 1,253,441 671,904 438,738 1,110,642
Santa Barbara 79,166 98,929 178,095 66,183 87,632 153,815
Santa Cruz 54,987 46,968 101,955 51,407 42,330 93,737
Total Campus
Endowments
4,386,195 3,358,357 7,744,552 3,975,161 2,901,309 6,876,470
Systemwide Programs
and Administration
1,055,030 - 1,055,030 962,322 - 962,322
Total Endowment
Assets
$5,441,225 $3,358,357 $8,799,582 $4,937,483 $2,901,309 $7,838,792
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UC Annual Endowment Report
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Table 2
Total Managed Endowment Assets by Foundation
(Excluding Pledges)
(Market Value $000)
June 30, 2010 June 30, 2009
Campus Managed Other* Total Managed Other* Total
Berkeley $875,764 $19,692 $895,456 $693,582 $92,176 $785,758
Davis 162,399 170 162,569 132,639 4,559 137,198
Irvine 192,331 (1,184) 191,147 163,173 (2,137) 161,036
Los Angeles** 1,051,401 7,278 1,058,679 894,907 3,931 898,838
Merced 5,080 0 5,080 4,339 0 4,339
Riverside 72,749 22 72,771 62,670 22 62,692
San Diego 315,376 1,352 316,728 281,251 1,497 282,748
San Francisco 510,030 0 510,030 438,513 0 438,513
Santa Barbara 98,929 0 98,929 87,632 0 87,632
Santa Cruz 46,968 0 46,968 42,330 0 42,330
Regents*** 4,976,985 464,240 5,441,225 4,527,824 409,659 4,937,483
Totals $8,308,012 $491,570 $8,799,582 $7,328,860 $509,707 $7,838,567
* Includes separately invested assets, mortgages, real estate, receivables, and other.
** Includes net receivables, real estate, securities, and other assets.
*** Includes GEP, STIP, and separately invested assets, as well as annuity and life income funds. Excludes security lending balances and other accounts receivable and payable.
For the purpose of this report, we focus on the managed endowment assets held by The Regents and the Foundations,
which include those assets managed by The Regents (Treasurer’s Office) or external managers. Managed endowment assets
do not include those assets categorized as “other endowment assets,” such as separately invested assets, mortgages, real
estate, and receivables.
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II. Managed Endowment Funds by Asset Class
Because asset allocation is the primary driver of a portfolio’s total return over the long run—with sector and individual
security selection the primary drivers over the short term—any comparison of endowment fund performance should be
viewed in the context of the portfolio’s asset class holdings.
As of June 30, 2010, the allocation of managed endowment funds by asset class for endowment investment portfolios
held by each Foundation, as well as for The Regents’ GEP, are shown below. Table 3 also includes an overall weighted
average allocation of all endowment funds by asset class, as well as the net total returns by campus.
Section IX, beginning on page 15, contains detailed information for each Foundation. These exhibits include a detailed
list of the Foundation’s investment managers and the type of funds they manage.
II
* Alternative Equities consist of private equity funds, real estate, natural resources and other asset types.
** Foundation endowment assets invested primarily in The Regents’ GEP and/or STIP funds.
Note that the method of rounding may produce the appearance of minor inconsistencies in various totals and percentages; however, the differences do not affect the
accuracy of the data.
Table 3
Allocation of Managed Endowment Funds by Asset Class
As of June 30, 2010
Asset Class Allocation
Campus
U.S.
Equity
Non-U.S.
Equity
Alternative
Equities*
U.S.
Fixed Inc.
Non-U.S.
Fixed Inc.
Cash
Equiv.
Absolute
Return
Total
Net Total
Return
Berkeley 15.9% 19.1% 17.1% 15.0% 3.2% 13.2% 16.5% 100.0% 11.7%
Davis ** 18.8 23.5 10.3 15.3 3.1 2.9 26.1 100.0 11.3
Irvine 20.5 17.2 19.7 14.2 3.4 1.9 23.1 100.0 11.0
Los Angeles 15.0 15.8 26.7 12.1 0.0 0.0 30.4 100.0 11.8
Merced ** 19.2 23.9 10.5 15.6 3.1 1.2 26.5 100.0 11.3
Riverside 13.5 29.8 11.5 29.4 3.5 9.2 3.1 100.0 15.8
San Diego ** 24.3 21.2 11.3 13.9 2.4 0.9 26.0 100.0 12.7
San Francisco 16.3 22.5 10.5 16.3 2.0 6.4 26.0 100.0 14.4
Santa Barbara 21.4 28.5 5.5 21.1 2.1 4.3 17.0 100.0 15.0
Santa Cruz ** 18.9 23.5 10.3 15.4 3.1 2.7 26.1 100.0 11.3
Regents’ GEP 19.2 23.9 7.7 18.7 0.0 1.2 29.3 100.0 11.3
Weighted Avg. 18.4% 22.3% 11.4% 17.2% 0.7% 2.7% 27.4% 100.0% 11.7%
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UC Annual Endowment Report
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III
III. Endowment Fund Investment Performance
Investment performance for University endowment assets is presented on a net basis, defined as total return after
investment management fees but before any gift fees and administrative charges. While investment management fees vary
across managers and asset classes, the net total return represents the annual experience of a donor’s gift. Table 4 displays
net total returns for fiscal 2010 for The Regents, each Foundation, and the Cambridge Endowment Pool Median for
Colleges and Universities, reported for periods of one, three, five and 10 years. For comparison, the table also includes
the overall one-, three-, five-, and 10-year weighted average returns for all University endowment assets.
* Returns prior to 2006 were provided by the individual Foundations. Returns for 2006 and later were provided by State Street Bank, except in extraordinary
circumstances.
Table 4
Average Annualized Total Returns
Fiscal Year ended June 30, 2010
Campus
1 Year 3 Years 5 Years 10 Years
Berkeley 11.7% -4.0% 4.1% 4.1%
Davis 11.3 -3.4 3.7 3.3
Irvine 11.0 -5.1 2.4 2.9
Los Angeles 11.8 -4.1 3.3 3.4
Merced 11.3 -3.6 3.7 N/A
Riverside 15.8 -2.5 5.2 5.4
San Diego 12.7 -4.1 3.3 2.8
San Francisco 14.4 -4.0 3.1 3.3
Santa Barbara 15.0 -6.6 1.8 2.0
Santa Cruz 11.3 -3.3 3.7 3.1
Regents’ GEP 11.3 -3.6 3.7 3.0
Weighted Average 11.7 -3.8 3.6 3.2
Cambridge Median 12.4 -3.8 4.0 3.9
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IV
IV. Endowment Fund Investment Management
Each Foundation selects the investment manager(s) for its endowment assets. Their choices may include The Regents
(GEP, STIP, UC Private Equity and Real Estate Vintage Equity Programs, and UC Absolute Return Unitized Program),
external managers, and/or the Foundation. Table 5 (below) provides the percentage of endowment assets managed by The
Regents, external managers, the Foundation (Internal), or “Other” (usually assets held separately at the donor’s request).
At the end of fiscal 2010, the Treasurer’s Office managed the majority of the endowment gift assets for four of the 10 UC
Foundations and 19.9% of the UC Foundations’ total endowment gift assets.
* Negative amount represents endowment payout not yet withdrawn from endowment assets.
Table 5
Foundation Endowment Assets by Investment Manager
at June 30, 2010
(Market Value $000)
Campus/Foundation Regents External Internal Other
Berkeley $107,164 12.0% $768,600 85.8% $0 0.0% $19,692 2.2%
Davis 162,399 99.9 0 0.0 0 0.0 170 0.1
Irvine 85,592 44.8 106,739 55.8 0 0.0 -1,184 -0.6
Los Angeles 15,210 1.4 1,040,486 98.3 0 0.0 2,983 0.3
Merced 5,080 100.0 0 0.0 0 0.0 0 0.0
Riverside 966 1.3 71,783 98.6 0 0.0 22 0.0
San Diego 244,140 77.1 70,271 22.2 964 0.3 1,353 0.4
San Francisco 0 0.0 510,030 100.0 0 0.0 0 0.0
Santa Barbara 1,169 1.2 97,760 98.8 0 0.0 0 0.0
Santa Cruz 46,968 100.0 0 0.0 0 0.0 0 0.0
Overall $668,689 19.9% $2,665,669 79.4% $964 0.0% $23,036 0.7%
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V
* For those fees not provided by the Foundation, the report used the same as estimates used by Treasurer’s Office for GEP.
V. Endowment Fund Investment Management Fees
As noted in Section III, investment performance for endowment assets should be presented on a net basis, after investment
management costs but before gift and administration fees. (See Section VI for gift fees and recurring charges.) Each
Foundation was asked to provide an investment management fee schedule for each external manager. State Street Bank
verified the reasonableness of each Foundations’ fee data and the fee data of the GEP and STIP. The last line in the table
below is a weighted average fee based on the information provided and the assets under management at June 30, 2010.
An itemization of each Foundation’s investment management fees—between externally managed endowment gift assets
and assets managed by The Regents—is provided in Table 6.
The total cost of managing the GEP is 140 basis points of average market value. This consists of approximately 1.31%
(131 basis points) attributable to external managers (evidenced as the difference between their gross and net returns),
plus 0.03% (3 basis points) attributable to investment management and custodial expenses, and 0.06% (6 basis points)
attributable to administrative costs.
For funds invested in STIP, approximately 0.06% (6.0 basis points) of average market value is charged to the pool, with
0.03% (3.0 basis points) attributable to investment management and custodial expenses, and 0.03% (3.0 basis points)
attributable to administrative costs associated with the pool.
Table 6
Endowment Management Fees by Foundation
as a Percentage of Market Value
at June 30, 2010
Campus Regents External Wtd. Average
Berkeley 0.06 1.08 0.97
Davis 1.38 - 1.38
Irvine 1.57 0.61 1.04
Los Angeles 1.59 2.21 2.20
Merced 1.40 - 1.40
Riverside - 1.12 1.12
San Diego 1.51 0.22 1.25
San Francisco - 0.76 0.76
Santa Barbara 0.06 0.62 0.61
Santa Cruz 1.38 - 1.38
Overall 1.22 1.41 1.38
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VI
* For more information on Foundation policies on gift fees and recurring charges, see the individual Foundation reports in Section IX.
VI. Gift Fees and Recurring Charges
A synopsis of The Regents’ and each campus’ practices for assessing fees on new gifts, as well as any recurring
administrative charges, are provided in Table 7. As noted in the table, gift fees apply to endowment gifts whether given
to the Foundation or The Regents and to current fund gifts (for use by the campus in the near term). At most campuses,
gift fees and recurring charges support discretionary funds available to the Chancellor, for such efforts as fund-raising,
communications, government and community relations and administrative services associated with these efforts.
In March 1998, The Regents adopted a policy to allow the campuses to recover the reasonable and actual costs related to
campus administration of Regents’ endowments, with the amount to be determined by historical cost data. As noted on
the following chart, each campus listed below collected endowment cost recovery fees on Regents’ gifts of 45 basis points
of the 60-month rolling average market value of funds invested in GEP. The Campus Foundations may also assess an
administrative endowment cost recovery fee on funds they administer.
Table 7
Gift Fees and Recurring Charges by Regents and Foundation
Fees Recurring Charges
The Regents
None A cost recovery fee of 45 basis points (0.45%) on the market value of the
GEP is taken out of the endowment payout annually.
Berkeley
One-time charge of 2.5% of the initial
value of all non-research gifts to the
Regents and Foundation (including
endowments); fee is taken from the
gift principal unless the specified
department elects to pay the fee from
another allowable source.
STIP income on non-endowed gifts is 100% to an unrestricted fund
administered by the chancellor. STIP income earned on new endowment
gifts kept in suspense for six months is paid to the chancellor’s fund to
benefit campus development. An annual administrative fee of 50 basis
points is charged on endowment funds administered by the Foundation.
Davis
6% on all gifts given on or after
October 1, 2004.
The campus and Foundation charge up to 100% of STIP income on current
fund balances. Endowment funds and funds functioning as endowments are
charged an annual administration fee of 30 basis points (0.30%).
Irvine
5% of initial value of all gifts. Annual charge of 0.5% of the market value, plus all interest on current use
private gifts and grants.
Los Angeles
6.5% of initial value of all gifts. 100% of all short-term interest on campus current fund balances, with some
exceptions. Annual endowment cost recovery fee of .5% of the fair market
value, calculated monthly.
Merced
5% of initial value of all gifts. 100% of STIP income on current fund balances.
Riverside
5% of initial value of all gifts. Annual charge of .5% against all existing endowments and endowment-
related gift funds; the campus charges 100% of short-term ordinary income
on campus and Foundation current fund balances.
San Diego
6% of initial value of all gifts. 100% assessment of all short-term investment earnings on current use gift
and private grant balances held in both the campus and the Foundation.
Annual recurring fee of 0.40% on the market value of the Foundation’s
endowment.
San Francisco
4% of initial value of all gifts. 100% of interest income earned on current funds (STIP income). Annual fee
of .40% on all endowment fund assets. A 1% spending fee is charged when
funds are spent for purpose. No fees are charged on gifts for student aid and
capital.
Santa Barbara
2% of initial value of all gifts, as of
June 30, 2010.
Annual endowment cost recovery fee is .45% of the fair market value. 100%
of STIP income on current fund balances.
Santa Cruz
3% of initial value of endowment gifts
and 5% of initial value of current use
gifts.
Annual recurring fee of 0.30% on the 3-year average market value of the
Foundation’s endowment.
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Fiscal Year Ended June 30, 2010
VII
VII. Endowment Spending Policies
A summary of the endowment spending policies for The Regents’ and each university Foundation is shown in Table 8. It
is important to note that a Foundation choosing to invest in The Regents’ GEP, Private Equity Vintage Year Program, Real
Estate Vintage Year Program and/or Absolute Return Unitized Program funds may apply its Foundation spending policy to
those gift assets.
* For more information on Foundation spending policies, see the individual Foundation reports in Section IX.
Table 8
Endowment Spending Policies by Regents and Foundation*
The Regents
(GEP)
Long-term target spending rate of 4.75% of a 60-month (five-year) rolling average market value. In May 2010, The
Regents concurred to continue a rate of 4.75% for expenditure in fiscal year 2010-2011.
Berkeley
The UC Berkeley Foundation endowment payout policy is a range of 4.75% to 5.5% of the 12-quarter moving
average market value of the endowment for a specific payout year. In fiscal year 2009-10, the actual payout rate was
4.75%.
Davis
Long-term target spending rate of 4.35% of a 60-month (5-year) rolling average market value. Effective spending
rate of 4.50% of a 60-month rolling average market value was used in fiscal 2009-2010.
Irvine
The endowment fund spending policy allows for allocation of income equivalent to 4.5% of the moving average
market value of the endowment portfolio. This average market value is computed using the previous 36 months of
portfolio activity. Income earned in excess of the spending rate may be reinvested in endowment principal. Income
available for expenditure is calculated according to a predetermined formula.
Los Angeles
The spending policy for fiscal year 2009-10 was 4.8% of a rolling 36-month average market value calculated
monthly.
Merced
Long-term total return target spending rate of 4.75% of a 60-month (5-year) rolling average market value. A
spending rate of 4.75% was adopted in May 2006 for expenditures in fiscal year 2006-2007, 2007-2008, 2008-2009,
and 2009-2010.
Riverside
The endowment fund payout policy is 4.75% of the average endowment fund market value computed using the
previous 12 quarters of portfolio activity the last of which ended on the March 31 of such fiscal year.
San Diego
Endowment spending during fiscal year 2009-10 was calculated using a predetermined formula at an amount equal
to 3.75% of the five–year average unit market value of the endowment portfolio. Spending is allocated to fund
holders monthly.
San Francisco
A portion of the endowment pool will be expended annually. The amount of the distribution will be determined by the
payout policy of the Foundation, modified by donors’ wishes where applicable. The Foundation policy is to distribute
5% of the market value of the endowment pool calculated on a 36-month rolling average of the market value, subject
to a 6% cap and a 3.5% floor as a percent of the end of year endowment pool market value. The payout rate is
reviewed annually, which may result in modification. The payout is distributed once a year following the close of the
fiscal year. Undistributed income and gains from investment activities are reinvested in the Endowment Pool.
Santa Barbara
The UC Santa Barbara Foundation adopted a total return spending policy for the 2009-2010 fiscal year of 4.75% of
the 60-month rolling average share value, as of December 31, 2008, for the Long Term Endowment Pool/General
Endowment Pool.
Santa Cruz
The UC Santa Cruz Foundation endowment expenditure rate is 4.5% times a three-year moving average of June 30
market values. The endowment expenditure formula is reviewed annually and adjusted accordingly with respect to
prudent concern for campus needs, donor expectations, and current market conditions. In no event will the corpus
be reduced below the amount of the original gift, adjusted by the Gross Domestic Product (GDP) price index,
unless specific language of the endowment agreement so allows.
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Table 9
Total Foundation Gift Assets by Campus
(Market Value $000; totals rounded)
June 30, 2010 June 30, 2009
Campus Endowed Non-Endowed Pledges Total Endowed Non-Endowed Pledges Total
Berkeley $895,456 $170,097 $13,110 $1,078,664 $785,758 $148,198 $25,721 $959,677
Davis 162,569 49,880 8,726 221,175 137,198 90,709 12,233 240,140
Irvine 191,147 12,417 42,390 245,954 161,036 29,152 66,112 256,300
Los Angeles 1,058,679 291,989 204,546 1,555,214 898,838 280,840 173,229 1,352,907
Merced 5,080 174 1,818 7,073 4,339 53 1,146 5,538
Riverside 72,771 16,345 1,283 90,399 62,692 17,457 1,020 81,169
San Diego 316,728 116,037 40,860 473,625 282,748 108,404 44,962 436,114
San Francisco 510,030 170,540 59,325 739,895 438,738 180,301 62,247 681,286
Santa Barbara 98,929 9,402 13,116 121,447 87,632 7,673 13,898 109,203
Santa Cruz 46,968 2,302 1,734 51,004 42,330 2,606 1,201 46,137
Total
Foundation
Assets
$3,358,358 $839,184 $386,908 $4,584,450 $2,901,309 $865,393 $401,770 $4,168,472
VIII. Total Foundation Gift Assets
Table 9 provides total Foundation gift assets by campus, split into endowed, non-endowed assets and pledges, for fiscal
2010 and fiscal 2009. Non-endowed assets include current gift assets (i.e., assets for use in the current year) and trust/life
income assets, but exclude pledges. Note, pledges introduce potential volatility to the asset growth rates.
As Table 9 shows, the Foundations held $3.36 billion in endowment gift assets at June 30, 2010, a 15.8% increase from
the $2.90 billion held at the end of fiscal 2009. Including all non-endowed assets (current assets and trusts/life income
assets) and pledges, the Foundations’ total assets were $4.58 billion, a 10.0% increase over the total of $4.17 billion for
fiscal year 2009.
VIII
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IX
IX. Individual Foundation Reports
The following section of the report contains a summary for each Foundation. Each summary includes the Foundation’s
Investment Objectives, Spending Policy and Gift Fee Policy, Total Assets, and Performance Data.
Foundation assets are categorized as endowed or non-endowed, with endowed assets further broken down by investment
manager. Non-endowed assets include life income and annuity funds, current funds and pledges. Only endowed assets
are shown, and investment results for all Foundations exclude non-endowed assets. The glossary in Section XIII provides
definitions of these asset categories.
In order to provide more meaningful performance comparisons and enable The Regents and other fiduciaries to
better perform their investment oversight responsibilities, the Treasurer, with the Regents’ Investment Consultant, has
augmented the Annual Endowment Report with investment policy and performance benchmarks for each Foundation, as
well as for the GEP.
We have included 10 years of annual fiscal net total returns for each Foundation both in graphical presentation and
tabular form (seven years for Merced). In addition, we have included a chart of the performance of a hypothetical $10,000
gift invested with the Foundation, the Benchmark and in GEP, at the beginning of the 10-year period, and have outlined
the ending gift values and annualized net total returns for the period. The bottom graph assumes all income is reinvested
in the fund (or benchmark) and no distributions are made from it.
Benchmarks
The most important determinant of fund performance and risk is the asset allocation policy established by Fund fiduciaries.
A fund performance benchmark is usually stated in term of percentages (adding to 100%) of a number of market indexes,
such as the Russell 3000 Index for U.S. stocks or the Barclays Capital Index for U.S. bonds. A performance benchmark
may change over time as policy changes both the asset mix and the performance objectives, or benchmarks, for each asset
class.
The Foundations provided the asset allocation and benchmark information summarized in Section XII. Based on the
Foundations’ reported policy, the Regents’ Investment Consultant computed annual and cumulative benchmark returns. They
are shown in Section X, Table 11, along with the Foundations’ annual and cumulative returns, Table 10. In some cases, detailed
information on investment policy in earlier years was not available, and the Treasurer approximated benchmark composition
based on the available information supplied by the Foundations.
In addition, the Active Return, or difference between Fund and benchmark return, is shown in Table 11. Active return is a
measure of the value added by Fund fiduciaries and managers over the policy objective.
The accompanying measures of risk and risk-adjusted returns in Section IX are approximate. In investment analysis, risk is
often measured as volatility, or the variability in returns. It is customary to use monthly returns for these computations.
Because only annual Fund returns were available, these measures of risk and risk-adjusted returns should be viewed as
indicative only; relative rankings may change slightly if monthly returns were used.
16
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
University of California, Berkeley Foundation
Endowment Investment Objectives:
Maintain the purchasing
power of the current assets and all future contributions;
maximize return within reasonable and prudent levels of risk;
maintain an appropriate asset allocation policy that is compatible
with the objectives of GEP, while still having the potential to
produce positive real returns; control costs of administering the
GEP assets and managing the investments; provide investment
results equal or superior to an appropriate peer universe;
limit the risk of large losses by diversification among broad
asset classes (e.g., domestic stocks, international stocks, fixed
income) and among the various styles within individual asset
classes (e.g., “growth” and “value” within domestic equity);
achieve a rate of return which exceeds that of a target-weighted
composite index based on the target asset allocation policy
adopted as follows: 40% Global Equity, 20% Marketable
Alternatives, 10% Private Equity, 9% Real Estate, 9% Energy/
Commodities/Other and 12% Fixed Income; and produce
a sufficient total fund return to provide a range of an annual
4.75% to 5.5% payout (based on a 12-quarter moving average
of market value of endowment principal) to GEP beneficiaries.
Endowment Spending Policy: The UC Berkeley Found-
ation endowment payout policy is a range of 4.75%
to 5.5% of the 12-quarter moving average market
value of the endowment for a specific payout year. In
fiscal year 2009-10, the actual payout rate is 4.75%.
Policy for Gift Fees and Administrative Expenses: (1)
One time charge of 2.5% of the initial value of all non-
research gifts to the Regents and Foundation (including
endowments). The fee is taken from the gift principal
unless the specified department elects to pay the fee
from another allowable source. (2) STIP income on
non-endowed gifts is 100% to an unrestricted fund
administered by the Chancellor. (3) STIP income earned
on new endowment gifts kept in suspense for six months
is paid to the Chancellor’s fund to benefit campus
development. (4) An annual administrative fee of 50 basis
points is charged on endowment funds administered by
the Foundation.
0%
20%
40%
60%
80%
100%
2006 2007 2008 2009 2010
Managed Endowment Funds by Asset Class
as of June 30
U.S. Equity
U.S. Fixed Income
Non-U.S. Equity Non-U.S. Fixed Income
Alternative Equity Absolute Return
Cash
6/30/10 % Endowment
Market Value Funds
($ 000)
ENDOWED ASSETS
Externally Managed Funds
U.S. Equity
Dodge & Cox-Equity $32,016 3.6%
TimesSquare Asset Mgmt. 9,420 1.1
Wellington Trust Appreciation 14,456 1.6
Wellington Energy 13,959 1.6
Van Eck 9,686 1.1
Adage Capital 42,150 4.7
DSM Large Cap Growth 12,602 1.4
Advisory Research 7,164 0.8
International Equity Funds
Harbor International Fund 39,094 4.4
Newport Asia Institutional Fund 7,385 0.8
Litman/Gregory Masters' Select Intl 39,737 4.4
Sanderson International Value 27,092 3.0
Acadian - Old Mutual Asset Mgmt 6,427 0.7
Emerging Markets
Grantham, Mayo, Van Otterloo & Co 24,233 2.7
City of London 26,879 3.0
Real Estate
Adelante Capital 14,111 1.6
LBA Realty Fund IV 445 0.0
Lone Star Real Estate Fund 2,116 0.2
Metropolitan Real Estate 4,102 0.5
E I I Int'l Property 12,148 1.4
Fixed Income
PIMCO Commodity Real Return 8,950 1.0
Dodge & Cox-Bond 14,198 1.6
Income Research & Management 86,911 9.7
Eaton Vance High Yield 12,126 1.4
OCM High Yield Limited Partnership 11,425 1.3
Brandywine Global 16,898 1.9
Mondrian Global Fixed Income 11,267 1.3
Private Equity/Venture Capital
Common Fund (VC II - VIII) 9,534 1.1
TCV IV, LP 1,383 0.2
TCV VII, LP 1,026 0.1
Horsely Bridge, VII 3,156 0.4
Summit Venture VI B 3,304 0.4
Sequoia Cap Seed Fund II 859 0.1
Sequoia Cap India Growth Fund II 663 0.1
Sequoia Cap U.S. Growth Fund IV 1,124 0.1
Horsely Bridge, VIII 8,502 0.9
Horsely Bridge Growth, VIII 4,815 0.5
Horsely Bridge International III 7,335 0.8
Horsely Bridge International IV 4,009 0.4
Horsely Bridge International V 181 0.0
Horsely Bridge, IX 1,331 0.1
CF Endowment Venture II - VI 6,833 0.8
TPG Partners V & VI 3,655 0.4
Blackstone Capital Partners V 2,983 0.3
OCM Opportunities Fund VII 5,487 0.6
Legacy Venture IV & V 7,144 0.8
Cerberus Institutional Partners Ser 8,673 1.0
Foundation Capital VI LP 1,998 0.2
CA Resources-Ser Bain Europe III 597 0.1
Kayne Anderson Energy Fund V (QP), LP 98 0.0
Charlesbank Equity Fund VII 328 0.0
Goldman Sachs Vintage V 2,771 0.3
August Capital V 652 0.1
Lone Star Fund VI (US) LP 3,817 0.4
Varde Fund IX/Varde Fund IX-A 9,819 1.1
Commonfund Natural Resources VI 1,433 0.2
Commonfund Natural Resources VII 2,433 0.3
Natural Gas Partners IX LP 1,303 0.1
Park Street Cap Nat Resources III 7,115 0.8
Absolute Returns 147,242 16.4
Total Externally Managed Funds $768,599 85.8%
Regentally Managed Funds
Short Term Investment Pool 107,164 12.0
Total Regentally Managed Funds $107,164 12.0%
Other Endowed Assets
Cash/Cash Equivalent 11,158 1.2
Other Receivables 1,982 0.2
Separately Invested Funds 6,026 0.7
SAM Mortgages 527 0.1
Total Other Endowed Assets $19,692 2.2%
TOTAL ENDOWED ASSETS $895,456 100.0%
17
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
Ending Values 2010 Annualized Returns 2001-2010
Berkeley Benchmark GEP Berkeley Benchmark GEP
$14,959 $13,374 $13,467 4.1% 2.9% 3.0%
University of California, Berkeley Foundation
Ten-Year Performance of a $10,000 Gift
Berkeley Foundation, Foundation Benchmark and GEP
1
The UC Berkeley Foundation’s net total return data excludes the High Income Endowment Pool (a separately managed asset) and Other
Endowed Assets for all periods.
Annual Endowment Returns for Years Ending June 30
Berkeley Foundation, Foundation Benchmark and GEP
$5,000
$15,000
$25,000
$35,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Berkeley Benchmark GEP
-30%
-20%
-10%
0%
10%
20%
30%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Berkeley
1
-5.0% -4.8% 3.4% 17.7% 11.3% 14.8% 20.3% -0.3% -20.6% 11.7%
Benchmark -9.5 -8.1 2.8 17.1 10.3 12.7 16.9 -1.2 -15.6 10.2
GEP -6.9 -9.5 5.4 14.7 10.3 11.5 19.8 -1.5 -18.2 11.3
18
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
UC Davis Foundation
6/30/10 % Endowment
Market Value Funds
($ 000)
ENDOWED ASSETS
Regentally Managed Funds
General Endowment Pool $159,636 98.2%
Short Term Investment Pool 2,762 1.71
Total Regentally Managed Funds $162,399 99.9%
Total Other Endowed Assets $170 0.1%
TOTAL ENDOWED ASSETS $162,569 100.0%
Endowment Investment Objectives: The investment
objective of The UC Davis Foundation is to maximize
the long-term total return, while assuming an
appropriate level of risk, and to provide spendable
income to sufficiently support the University activities
designated by the endowed funds. The investment
policy matches that of GEP.
Endowment Spending Policy: Long-term target spending
rate of 4.35% of a 60-month (5-year) rolling average
market value. Effective spending rate of 4.50% of a
60-month rolling average market value was used in
fiscal 2009.
Policy for Gift Fees and Administrative Expenses: UC Davis
assesses a one-time fee of 6% on all gifts given on or
after October 1, 2004. The campus and Foundation
charge up to 100% of STIP income on current fund
balances. Endowment funds and funds functioning as
endowments are charged an annual administration fee
of 30 basis points (0.30%).
0%
20%
40%
60%
80%
100%
2006 2007 2008 2009 2010
Managed Endowment Funds by Asset Class
as of June 30
U.S. Equity U.S. Fixed Income
Non-U.S. Equity Non-U.S. Fixed Income
Alternative Equity Absolute Return
Cash
19
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
UC Davis Foundation
Annual Endowment Returns for Years Ending June 30
UC Davis Foundation, Foundation Benchmark and GEP
Ten-Year Performance of a $10,000 Gift
UC Davis Foundation, Foundation Benchmark and GEP
Ending Values 2010 Annualized Returns 2001-2010
Davis Benchmark GEP Davis Benchmark GEP
$13,837 $14,213 $13,467 3.3% 3.6% 3.0%
1
The UC Davis Foundation’s net total return data excludes Other Endowed Assets for all periods.
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Davis
1
-5.6% -8.3% 5.5% 14.4% 10.2% 11.3% 19.7% -1.4% -17.9% 11.3%
Benchmark -5.9 -7.7 5.0 14.6 9.5 11.1 18.1 0.0 -13.1 9.1
GEP -6.9 -9.5 5.4 14.7 10.3 11.5 19.8 -1.5 -18.2 11.3
$5,000
$15,000
$25,000
$35,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Davis Benchmark GEP
-30%
-20%
-10%
0%
10%
20%
30%
20
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
University of California, Irvine Foundation
6/30/10 % Endowment
Market Value Funds
($ 000)
ENDOWED ASSETS
Externally Managed Funds
Large-Cap Equity Funds
Vanguard Windsor II Fund $6,422 3.4%
JPMorgan 7,768 4.1
Cadence Capital Mgmt 6,696 3.5
Small-Cap Equity Funds
Thompson, Siegel & Walmsley 2,951 1.5
Palisade Capital Management 3,491 1.8
Balanced Equity Funds
Berkshire Hathaway 1,434 0.8
I-Shares 4,115 2.2
Global Equity Funds
Brandes 8,800 4.6
William Blair 9,012 4.7
Bond Funds
Pimco Instl.Total Return 9,773 5.1
Pimco Instl.High Yield 618 0.3
Pimco Instl.Low Duration 6,163 3.2
Pimco Emerging Markets 1,042 0.5
Evergreen 3,788 2.0
Real Estate
TIAA-CREF 6,813 3.6
Alternative Equity
Common Fund 21,337 11.2
PIMCO Bank Loan Opportunities 4,243 2.2
Drum Capital Mgmt 2,273 1.2
Total Externally Managed Funds $106,739 55.8%
Regentally Managed Funds
UC Vintage Year 2003 1,063 0.6
UC Vintage Year 2007 735 0.4
UC Vintage Year 2008 1,588 0.8
UC Real Estate 716 0.4
UC Absolute Return 12,991 6.8
UC Viking Global 10,000 5.2
General Endowment Pool 55,587 29.1
Short Term Investment Pool 2,912 1.5
Total Regentally Managed Funds 85,592 44.8%
Other Endowment Assets $-1,184 -0.6%
TOTAL ENDOWED FUNDS $191,147 100.0%
Endowment Investment Objective: The Irvine Foundation’s
investment objective for its endowment portfolio is to maximize
long-term total return, with a total return objective (net of fees),
measured over a full market cycle, of not less than the rate of
inflation as measured by the CPI, plus 500 basis points. Ideally,
total return should exceed market performance. The investment
policy is 22% U.S. Equity, 22% Non-U.S. Equity, 20% Hedge
Funds, 15% Fixed Income, 8% Private Equity and Venture
Capital, 8% Real Estate, 5% Commodities, and 0% Cash.
Endowment Spending Policy: The endowment fund spending
policy allows for allocation of income equivalent to 4.5% of
the moving average market value of the endowment portfolio.
This average market value is computed using the previous 36
months of portfolio activity. Income earned in excess of the
spending rate may be reinvested in endowment principal.
Income available for expenditure is calculated according to a
predetermined formula.
Policy for Gift Fees and Administrative Expenses: The Irvine
Campus charges a one-time fee of 5% of the initial value of all
Foundation and Regents’ gifts. The fee may be taken (1) from
the principal if specified by the donor, (2) by holding gift in
a suspense account until fee is earned or (3) from another
acceptable fund source. There is also a recurring charge of 0.5%
of the market value of Foundation endowment funds used to
offset the operating costs of managing the endowment for the
Foundation. All interest earned on the balances of current use
private gifts and private grants is credited to the Chancellor’s
Discretionary Fund and used to support ongoing fundraising
efforts at UC Irvine.
0%
20%
40%
60%
80%
100%
2006 2007 2008 2009 2010
Managed Endowment Funds by Asset Class
as of June 30
U.S. Equity U.S. Fixed Income
Non-U.S. Equity Non-U.S. Fixed Income
Alternative Equity Absolute Return
Cash
21
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
University of California, Irvine Foundation
Annual Endowment Returns for Years Ending June 30
Irvine Foundation, Foundation Benchmark and GEP
Ten-Year Performance of a $10,000 Gift
Irvine Foundation, Foundation Benchmark and GEP
1
The UC Irvine Foundation’s net total return data includes a portion of Other Endowed Assets for all periods.
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Irvine
1
-3.4% -7.2% 6.5% 15.6% 7.7% 10.9% 18.7% -2.9% -20.6% 11.0%
Benchmark -6.2 -6.6 3.2 15.1 9.3 10.3 19.0 -6.4 -16.1 9.2
GEP -6.9 -9.5 5.4 14.7 10.3 11.5 19.8 -1.5 -18.2 11.3
Ending Values 2010 Annualized Returns 2001-2010
Irvine Benchmark GEP Irvine Benchmark GEP
$13,371 $12,810 $13,467 2.9% 2.5% 3.0%
$5,000
$15,000
$25,000
$35,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Irvine Benchmark GEP
-30%
-20%
-10%
0%
10%
20%
30%
22
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
The UCLA Foundation
ENDOWED ASSETS
Externally Managed Funds
U.S. Equity Funds
DFA Emerging Markets Core 24,632 2.3%
DFA Emerging Markets Value 42,442 4.0
DFA International Small Co 17,091 1.6
Hansberger Global Investors, Inc. 69,352 6.6
UCLA in-house - I shares Russel Midcap 17,239 1.6
J P Morgan 130/30 Large Cap 33,772 3.2
PIMCO Fundamental Index Plus 13,278 1.3
PIMCO Fundamental Index Plus TR 29,317 2.8
PIMCO International Stock Plus TR 12,320 1.2
Regents General Endowment Pool 3,322 0.3
T Rowe Price Structured Research 30,882 2.9
Timessquare - Corp. Stocks 30,053 2.8
Fixed Income
BGI Tactical Fund 16,029 1.5
PIMCO Total Return Fund 110,089 10.4
SSGA Collateral Fund 812 0.1
Marketable Alternatives
All Blue 17,320 1.6
AQR Capital Management 12,340 1.2
BGI Global Ascent 12,284 1.2
Black River Global Multi Strategy 5,444 0.5
Brevan Howard 17,225 1.6
Brookside Capital 13,529 1.3
Canyon Value Realisation 598 0.1
Carl Marks Strategic Opp 2,249 0.2
Carlson Black Diamond (Relative Value) 9,340 0.9
Davidson Kempner Distressed Opport. 5,531 0.5
Eton Park Overseas 14,514 1.4
GEM Realty Securities, LTD 9,987 0.9
Healthcor Offshore, LTD 9,723 0.9
Highbridge Capital Corporation 13,830 1.3
Ionic Capital International (Relative Val) 10,365 1.0
Maverick Fund 11,387 1.1
MKP Credit Offshore LTD 10,210 1.0
Oaktree Japan Fund 821 0.1
O’Connor Global Fundamental 14,837 1.4
Owl Creek Overseas Fund 14,281 1.3
OZ Asia Overseas 5,793 0.5
OZ Europe Overseas Fund Ltd II 5,288 0.5
OZ Overseas Fund II, Cayman 6,406 0.6
PE Investments 11,709 1.1
Paulson Advantage (Event Driven) 13,717 1.3
Regiment (Relative Value) 10,841 1.0
Samlyn 4,636 0.4
Taconic Opportunity Fund 13,904 1.3
Tiger Asia Overseas Fund 11,016 1.0
Tree Line Asia 7,178 0.7
Vicis Capital Fund Intl 4,221 0.4
Viking Global Equities III (Eqt Long/Short) 13,834 1.3
Winton Diversified Futures 11,858 1.1
Zaxis Offshore Limited 10,528 1.0
Non-Marketable Alternatives
Bain Capital IX 5,532 0.5
Bain Capital X 2,915 0.3
Blackstone Capital Partners V 7,124 0.7
Brentwood Partners III 3,862 0.4
Brentwood Partners IV 3,510 0.3
Charter Oak Partners 301 0.0
Clearstone 3,376 0.3
EOS Partnership 6,731 0.6
Lexington Partners 9,051 0.9
6/30/10 % Endowment
Market Value Funds
($ 000)
Non-Marketable Alternatives continued
Lightspeed Venture 1,353 0.1%
Morgenthaler Partners VII 2,061 0.2
Morgenthaler Partners VIII 2,698 0.3
MPM Bio IV 3,257 0.3
Northgate Private Equity II 3,326 0.3
Northgate Private Equity III 2,278 0.2
Northgate Venture Partners III 2,411 0.2
OCM Asia Principal Fund 2,077 0.2
OCM GFI Power Opp fund II 1,723 0.2
OCM Opportunities Fund V, LP 672 0.1
OCM Opportunities Fund VI, LP 4,069 0.4
OCM Opportunities Fund VII, LP 4,661 0.4
OCM Opportunities Fund VII B, LP 6,313 0.6
OCM Principal Opportunities Fund II 2,732 0.3
OCM Principal Opportunities Fund III 7,878 0.7
OCM Principal Opportunities Fund IV 9,534 0.9
OCM Principal Opportunities Fund V 2,875 0.3
Panorama Capital 3,090 0.3
Pantheon USA Fund VI 11,022 1.0
Permal Private Equity Holding IV 3,162 0.3
Polaris Venture Partners IV 4,402 0.4
RCP Fund III 2,923 0.3
UC Vintage Equity Fund 2003 5,373 0.5
Sevin Rosen 617 0.1
Sigular & Guff 2,694 0.3
Sigular & Guff II 4,263 0.4
Sigular & Guff Small Buyout Opport. 2,422 0.2
Thomas H. Lee Equity V 5,489 0.5
Thomas H. Lee Equity VI 2,301 0.2
Three Arch Capital , LP 3,268 0.3
Three Arch Capital, IV 2,371 0.2
Welsh, Carson, Anderson & Stowe IV 2,248 0.2
Welsh, Carson, Anderson & Stowe VIII 3,192 0.3
Welsh, Carson, Anderson & Stowe IX 5,017 0.5
Welsh, Carson, Anderson & Stowe X 4,236 0.4
Real Estate Funds
DLJ Real Estate IV 3,635 0.3
Heitman R/E 8,047 0.8
Morgan Stanley Real Estate 379 0.0
Prudential Invest Mgt 16,272 1.5
Regents Real Estate 2,220 0.2
Rockpoint Real Estate III 4,262 0.4
Realty Associates VIII 5,289 0.5
TIAA CREF 6,039 0.6
Inflation Hedge
CSAM 16,004 1.5
GMO Forestry Fund 8-B LP 5,330 0.5
Kayne Anderson MLP 16,593 1.6
Lehman Strategic Commodities 5,869 0.6
Timber vest Partners 7,855 0.7
Timbervest Partners II 11,501 1.1
Cash and Other Assets
Cash -167 0.0
Individual Share Holdings 895 0.1
UIP Inv in Hedge Fund -16,406 -1.5
Total Externally Managed Funds 1,051,401 99.3%
Other Endowed Assets
Endowed funds invested in STIP 4,295 0.4
Other 2,983 0.3
Total Other Endowed Assets 7,278 0.7%
TOTAL ENDOWED ASSETS 1,058,679 100.0%
6/30/10 % Endowment
Market Value Funds
($ 000)
23
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
The UCLA Foundation
Endowment Investment Objective: The Foundation’s
investment objective is to maximize long-term total returns
consistent with prudent levels of risk. Investment returns
are expected to preserve or enhance the real value of the
endowment to provide adequate funds to sufficiently
support designated University activities. The endowment’s
portfolio is expected to generate a total annualized rate of
return, net of fees and spending, greater than the rate of
inflation over a rolling five-year period. The investment
policy consists of: 13% U.S. Equity, 14% Non-U.S. Equity,
23% Private Equity, 7% Real Estate, 32% Absolute Return,
and 11% Fixed Income.
Endowment Spending Policy: The UCLA Foundation
Endowment Pool made available for expenditure by fund
holders an amount equal to 4.8% of a rolling 36-month
average market value in fiscal year 2010, calculated
monthly. The spending policy for fiscal 2011 is 5.20%
of a rolling 36-month average market value, calculated
monthly.
Policy for Gift Fees and Administrative Expenses: The
UCLA Foundation charges a one-time fee of 6.5% of the
initial value of all gifts.
Note: Balanced fund decomposed into constituent asset classes.
0%
20%
40%
60%
80%
100%
2006 2007 2008 2009 2010
Managed Endowment Funds by Asset Class
as of June 30
U.S. Equity U.S. Fixed Income
Non-U.S. Equity Non-
U.S. Fixed Income
Alternative Equity Absolute Return
Cash
24
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
Annual Endowment Returns for Years Ending June 30
The UCLA Foundation, Foundation Benchmark and GEP
Ten-Year Performance of a $10,000 Gift
The UCLA Foundation, Foundation Benchmark and GEP
Ending Values 2010 Annualized Returns 2001-2010
Los Angeles Benchmark GEP Los Angeles Benchmark GEP
$14,014 $12,205 $13,467 3.4% 2.0% 3.0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Los Angeles -1.3% -8.9% 4.5% 15.2% 10.2% 12.9% 17.8% 0.1% -21.1% 11.8%
Benchmark -9.6 -10.5 3.0 16.2 8.8 10.3 17.1 0.6 -19.0 10.1
GEP -6.9 -9.5 5.4 14.7 10.3 11.5 19.8 -1.5 -18.2 11.3
1
The UCLA Foundation’s net total return data excludes Other Endowed Assets for all periods.
The UCLA Foundation
-30%
-20%
-10%
0%
10%
20%
30%
$5,000
$15,000
$25,000
$35,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Los Angeles Benchmark GEP
25
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
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26
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
University of California, Merced Foundation
6/30/10 % Endowment
Market Value Funds
($ 000)
ENDOWED ASSETS
Regentally Managed Funds
General Endowment Pool $5,080 100.0%
Total Regentally Managed Funds $5,080 100.0%
TOTAL ENDOWED ASSETS $5,080 100.0%
Endowment Investment Objective: UC Merced Foundation’s
investment objectives are: (1) provide investment earnings
adequate to secure the benefits promised and the financial
obligations created by the endowment, and (2) secure,
preserve, and increase the inflation-adjusted value of the Fund.
Endowment Spending Policy: Long-term total return
target spending rate of 4.75% of a 60-month (five-year)
rolling average market value. A spending rate of 4.75%
was adopted in May 2006 for expenditures in fiscal year
2006-2007, 2007-2008, 2008-2009, and 2009-2010.
Policy for Gift Fees and Administrative Expenses: The
University expects that funds privately raised shall support
the development activities of the Chancellor and his staff.
Currently, the University policy to effectuate this principle is
the following: Upon the receipt of all gifts to UCM or the UCM
Foundation, a fee of 5% of the initial value of the gift shall be
assessed and deposited in the Chancellor’s Discretionary Fund
and shall support the necessary operations for the development
function within the Chancellor’s campus administration. The
fee may be taken (1) from the principal if specified by the donor,
(2) by holding the gift in a suspense account until fee is earned
or (3) from another acceptable fund source. Additionally, all of
the STIP income earned on endowments, funds functioning as
endowments and non-endowment gifts shall also be deposited
into the Chancellor’s Discretionary Fund. The Vice President
for Administration shall provide for a scheduled annual
distribution of income and shall assess initial fees on gifts for
deposit in the Chancellor’s Discretionary Fund. The Chancellor
shall waive the assessment of the off-the-top fee on ongoing
interest earnings only in the event that a donor organization
has a written policy which prohibits such fees.
Any waiver shall be communicated in writing from the
Chancellor to the Vice Chancellor for Administration. It is
the responsibility of the Vice Chancellor for Advancement to
establish an appropriate method for notifying donors to the
University and the University Foundation of the fee assessment
and its purposes.
0%
20%
40%
60%
80%
100%
2006 2007 2008 2009 2010
Managed Endowed Funds by Asset Class
as of June 30
U.S. Equity U.S. Fixed Income
Non-U.S. Equity Non-U.S. Fixed Income
Alternative Equity Absolute Return
Cash
27
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
University of California, Merced Foundation
Annual Endowment Returns for Years Ending June 30
University of California, Merced Foundation, Foundation Benchmark and GEP
Seven-Year Performance of a $10,000 Gift
University of California, Merced Foundation, Foundation Benchmark and GEP
Ending Values 2010 Annualized Returns 2003-2010
Merced Benchmark GEP Merced Benchmark GEP
$15,165 $15,586 $15,164 6.1% 6.5% 6.1%
2003 2004 2005 2006 2007 2008 2009 2010
Merced 5.4% 14.7% 10.3% 11.5% 19.8% -1.5% -18.2% 11.3%
Benchmark 5.0 14.6 9.5 11.0 18.1 0.0 -13.1 9.1
GEP 5.4 14.7 10.3 11.5 19.8 -1.5 -18.2 11.3
-20%
-10%
0%
10%
20%
$5,000
$15,000
$25,000
$35,000
2003 2004 2005 2006 2007 2008 2009 2010
Merced Benchmark GEP
28
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
UC Riverside Foundation
6/30/10 % Endowment
Market Value Funds
($ 000)
ENDOWED ASSETS
Externally Managed Funds
International Equity Funds
Oberweis China Opportunities $1,941 2.7%
Janus Overseas 3,814 5.2
Goldman Sachs BRIC 886 1.2
Balanced Funds
TIFF Multi Asset Fund 30,827 42.4
Ivy Asset Strategy 4,191 5.8
First Eagle Global 6,290 8.6
Blackrock Global Allocation 4,089 5.6
Other Equities
Park Street Natural Resources 450 0.6
U.S. Global Resources 4,181 5.7
High Yield Bonds
Fidelity Capital & Income 7,525 10.3
Pioneer Global High Yield 7,589 10.4
Total Externally Managed Funds $71,783 98.6%
Regentally Managed Funds
Short Term Investment Pool 966 1.3
Total Regentally Managed Funds $966 1.3%
Other Endowed Assets $22 0.0%
(primarily real estate, art and receivables)
TOTAL ENDOWED ASSETS $72,771 100.0%
Endowment Investment Objective: The Riverside Foundation’s
long-term investment objectives of the endowment fund are
to produce a relatively predictable and stable payout stream
each year and to grow both the payout stream and the corpus
over time at least as fast as the general rate of inflation, as
measured by the Consumer Price Index. The investment policy
consists of allowable ranges: 50-90% Global Equity and 10-
50% Global Bonds.
Endowment Spending Policy: The endowment fund payout
policy is 4.75% of the average endowment fund market value
computed using the previous 12 quarters of portfolio activity
the last of which ended on the March 31 of such fiscal year.
Policy for Gift Fees and Administrative Expenses: A one-time
Gift Service Fee of 5% is charged on all cash gifts received by
the University based on the principal value of the gift. The fee
is collected either from the initial interest/income earned by
the gift, directly from the gift principal or the recipient of the
gift may provide the fee from another acceptable fund source.
An Administration Cost Recovery Fee is charged against all
existing endowments and endowment-related gift funds at an
annual rate of .50% (50 basis points) of the average rolling
market value of funds eligible invested assets as calculated per
the UCR Foundation spending policy. Campus collects 100%
of short-term ordinary income on campus and Foundation
current fund balances. All proceeds from fees become a
Chancellorial resource intended to help defray development
and gift administration costs.
0%
20%
40%
60%
80%
100%
2006 2007 2008 2009 2010
Managed Endowment Funds by Asset Class
as of June 30
U.S. Equity U.S. Fixed Income
Non-U.S. Equity Non-
U.S. Fixed Income
Alternative Equity Absolute Return
Cash
29
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
UC Riverside Foundation
Annual Endowment Returns for Years Ending June 30
UC Riverside Foundation, Foundation Benchmark and GEP
Ten-Year Performance of a $10,000 Gift
UC Riverside Foundation, Foundation Benchmark and GEP
Ending Values 2010 Annualized Returns 2001-2010
Riverside Benchmark GEP Riverside Benchmark GEP
$16,992 $13,690 $13,467 5.4% 3.2% 3.0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Riverside
1
0.5% -4.1% 4.1% 18.1% 11.3% 14.2% 21.7% 2.8% -22.1% 15.8%
Benchmark -4.8 -7.8 2.1 18.0 10.4 13.6 20.2 -4.5 -19.4 11.5
GEP -6.9 -9.5 5.4 14.7 10.3 11.5 19.8 -1.5 -18.2 11.3
1
The Riverside Foundation’s net total return data excludes a portion of Other Endowed Assets for all periods.
-30%
-20%
-10%
0%
10%
20%
30%
$5,000
$15,000
$25,000
$35,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Riverside Benchmark GEP
30
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
U.C. San Diego Foundation
6/30/10 % Endowment
Market Value Funds
($ 000)
ENDOWED ASSETS
Externally Managed Funds
Large-Cap U.S. Equity Funds
iShares S&P 500 Index $20,255 6.4%
Mid & Small-Cap U.S. Equity Funds
Vanguard MidCap Index Institutional 6,753 2.1
Vanguard SmallCap Index Fund Institutional 7,489 2.4
International Equity Funds
SSgA MSCI EAFE Index Fund 8,651 2.7
Emerging Market Equity Funds
Vanguard Emerging Market 5,488 1.7
Other Equities
Vanguard Inflation Protected Securities 9,151 2.9
iShares Cohen & Steers Realty Majors REIT 6,559 2.1
Fixed Income
America Movil Bond 341 0.1
U.S. Mex Bond 381 0.1
Real Estate
Prudential PRISA Fund 5,201 1.7
Cash
Cash equivalents held in managed accounts 2 0.0
Total Externally Managed Funds $70,271 22.2%
Internally Managed Funds
Individual Securities 109 0.0%
Real Property 855 0.3
Total Internally Managed Funds $964 0.3%
Regentally Managed Funds
General Endowment Pool 220,014 69.5%
UC Absolute Return Fund 13,020 4.1
UC Real Estate Fund 3,354 1.0
Short Term Investment Pool 594 0.2
UC Vintage Equity Fund 2003 3,487 1.1
UC Vintage Equity Fund 2007 3,671 1.2
Total Regentally Managed Funds $244,140 77.1%
Other Endowed Assets
Art Work 19 0.0%
Partnership 1,297 0.4%
Other 37 0.0%
Total Other Endowed Assets $1,353 0.4%
TOTAL ENDOWED ASSETS $316,728 100.0%*
Endowment Investment Objective: The U.C. San Diego
Foundation’s primary investment goal for its endowment is to
maximize long-term total return, utilizing a diversified portfolio
consistent with prudent levels of risk. Endowment portfolio
performance is expected to preserve or enhance the real value
of the endowment and the purchasing power of the spending.
The portfolio return goal is to achieve an annualized total net
return at least equivalent to, and preferably exceeding, the
endowment spending rate plus inflation, over rolling five and
ten year periods. The investment policy target asset allocation
is 24% U.S. Equity, 22% Non-U.S. Equity, 7% Private Equity,
20% Absolute Return, 10% Real Estate, 7% TIPS/Real Return,
and 10% Fixed Income.
Endowment Spending Policy: Endowment spending during
fiscal year 2009-10 was calculated using a predetermined
formula at an amount equal to 3.75% of the five–year average
unit market value of the endowment portfolio. Spending is
allocated to fund holders monthly.
Policy for Gift Fees and Administrative Expenses: During fiscal
year 2009-10, the San Diego campus assessed a one-time fee of
6% on the initial value of all gifts made to either the Foundation
or The Regents. There was also a recurring charge of 0.40%
annually on the market value of the Foundation’s endowment
funds. All of the gift fees and the endowment fees were used
to provide funding for the centrally managed fundraising and
related operations of the campus. During fiscal 2009-10, the
campus assessed all interest earned on the balances of current
use gift and private grant funds held by both the Foundation
and the campus, which became a chancellorial resource.
0%
20%
40%
60%
80%
100%
2006
2007
2008
2009
2010
Managed Endowment Funds by Asset Class
as of June 30
U.S. Equity U.S. Fixed Income
Non-U.S. Equity
Non-U.S. Fixed Income
Alternative Equity Absolute Return
Cash
* The method of rounding may produce the appearance of a minor inconsistency
in the percentage but the difference does not affect the accuracy of the data.
31
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
U.C. San Diego Foundation
Annual Endowment Returns for Years Ending June 30
U.C. San Diego Foundation, Foundation Benchmark and GEP
Ten-Year Performance of a $10,000 Gift
U.C. San Diego Foundation, Foundation Benchmark and GEP
Ending Values 2010 Annualized Returns 2001-2010
San Diego Benchmark GEP San Diego Benchmark GEP
$13,158 $13,762 $13,467 2.8% 3.2% 3.0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
San Diego
1
-6.9% -9.5% 5.2% 14.5% 10.2% 11.7% 19.3% -1.5% -20.5% 12.7%
Benchmark -5.9 -7.7 5.2 15.3 10.3 11.1 18.1 0.0 -18.3 10.7
GEP -6.9 -9.5 5.4 14.7 10.3 11.5 19.8 -1.5 -18.2 11.3
1
The U.C. San Diego Foundation’s net total return data excludes Other Endowed Assets for all periods.
-30%
-20%
-10%
0%
10%
20%
30%
$5,000
$15,000
$25,000
$35,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
San Diego
Benchmark
GEP
32
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
Endowment Investment Objective: The San Francisco
Foundation’s primary investment objective for its endowment
portfolio is growth of principal sufficient to preserve purchasing
power and to provide income to support current and future
University activities. Over the long term, it is the goal of the
Foundation that the total return on investment assets should
equal the rate of inflation, plus the payout rate (which is used
to support current activities), plus an amount reinvested to
support future activities.
Endowment Spending Policy: A portion of the endowment pool
will be expended annually. The amount of the distribution will
be determined by the payout policy of the Foundation, modified
by donors’ wishes where applicable. The Foundation policy is
to distribute 5% of the market value of the endowment pool
calculated on a 36-month rolling average of the market value,
subject to a 6% cap and a 3.5% floor as a percent of the end of
year endowment pool market value. The payout rate is reviewed
annually, which may result in modification. The payout is
distributed once a year following the close of the fiscal year.
Undistributed income and gains from investment activities are
reinvested in the Endowment Pool.
Policy for Gift Fees and Administrative Expenses: The
University of California, San Francisco Foundation assesses a
one-time fee of 4% of the initial value of gifts. The University
also assesses a 1% spending fee at the time that funds are
spent for purpose. Gifts for student aid and capital gifts are
exempted from these fees. An annual administrative fee of 40
basis points is charged on endowment funds administered by
the Foundation. In addition, the University assesses a recurring
charge of 100% of interest income earned on current funds
(STIP income). Fees are used by the University to fund central
infrastructure costs, including development and gift and
endowment administration.
University of California, San Francisco Foundation
6/30/10 % Endowment
Market Value Funds
($ 000)
ENDOWED ASSETS
Externally Managed Funds
Large Cap Value
Dodge & Cox $30,251 5.9%
Vanguard S&P 500 Index 22,208 4.4
Mid Cap
ValueAct Capital Intl II 10,911 2.1
All Cap
Eagle Capital Management 19,531 3.8
International Equity Funds
Capital Guardian Trust 3 0.0
Gryphon International 25,752 5.0
Silchester 29,152 5.7
Dodge & Cox International Fund 22,618 4.4
International Emerging Equity
Tiedemann Long Duration 6,447 1.3
Westwood Global Invest. Emerging Mkts 17,389 3.4
Aberdeen Emerging Markets 13,601 2.7
Real Estate & Hard Assets
Metropolitan RE Partners III 2,659 0.5
Metropolitan RE Partners Intl II 829 0.2
Shorenstein SRI Nine REIT 1,009 0.2
CommonFund Capital Natural Res. V 1,625 0.3
Denham Commodity Fund V 1,512 0.3
LBA Realty IV 548 0.1
Cambrian Capital Natural Resources 9,508 1.9
PIMCO Commodity Real Return 10,258 2.0
Private Equity--Venture Capital, Distressed Debt
Oaktree Principal Opportunity Fnd III 3,821 0.7
Oaktree Principal Opportunity Fnd IV 2,841 0.6
CommonFund Capital EVP IV 1,282 0.3
CommonFund Capital EVP V 2,227 0.4
CommonFund Capital CVP VI 2,605 0.5
Burrill Biotech Capital Fund LP 767 0.2
TIFF Private Equity Partners 2007 2,097 0.4
TIFF Private Equity Partners 2008 1,457 0.3
Friedman Fleisher & Lowe Cap. Partn. III 556 0.1
Varde Partners Fund IX-A 6,464 1.3
Varde Partners Fund X-B 1,498 0.3
Hedge Fund
Protégé Partners LTD 7,180 1.4
TIFF Absolute Return Fund II 14,891 2.9
Farallon Capital Partners 11,841 2.3
Canyon Value Realization Fund 14,085 2.8
Forrester Offshore - Long/Short 16,494 3.2
Watershed Institutional Partners 11,488 2.3
Sankaty-Prospect Harbor Fund 8,666 1.7
Regiment Capital Special Situations IV 1,839 0.4
Brookside Capital Partners Fund 10,360 2.0
Baupost Value Partners IV 35,670 7.0
Bond Fund
Dodge & Cox 63,033 12.4
Vanguard Inflation Protected 20,219 4.0
Non-U.S. Bond Fund
Colchester Global 10,213 2.0
Cash 32,625 6.4
Total Externally Managed Funds $510,030 100.0%
TOTAL ENDOWED ASSETS $510,030 100.0%
0%
20%
40%
60%
80%
100%
2006 2007 2008 2009 2010
Managed Endowment Funds by Asset Class
as of June 30
U.S. Equity U.S. Fixed Income
Non-U.S. Equity Non-U.S. Fixed Income
Alternative Equity Absolute Return
Cash
33
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
University of California, San Francisco Foundation
Annual Endowment Returns for Years Ending June 30
San Francisco Foundation, Foundation Benchmark and GEP
Ten-Year Performance of a $10,000 Gift
San Francisco Foundation, Foundation Benchmark and GEP
Ending Values 2010 Annualized Returns 2001-2010
San Francisco Benchmark GEP San Francisco Benchmark GEP
$13,894 $12,203 $13,467 3.3% 2.0% 3.0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
San Francisco
1
-1.5% -6.8% 0.9% 17.2% 10.1% 11.3% 18.2% -7.5% -16.5% 14.4%
Benchmark -6.1 -9.1 4.3 17.2 11.1 10.5 17.1 -6.2 -21.9 11.0
GEP -6.9 -9.5 5.4 14.7 10.3 11.5 19.8 -1.5 -18.2 11.3
1
The UC San Francisco Foundation’s net total return data excludes Other Endowed Assets for all periods.
$5,000
$15,000
$25,000
$35,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
San Francisco Benchmark GEP
-
30%
-
20%
-
10%
0%
10%
20%
30%
34
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
UC Santa Barbara Foundation
6/30/10 % Endowment
Market Value Funds
($ 000)
ENDOWED ASSETS
Externally Managed Funds
Equity Funds
American Fund $160 0.2%
Andron Fund 1,165 1.2
Long Term Investment Pool 96,435 97.5
Total Externally Managed Funds $97,760 98.8%
Regentally Managed Funds
General Endowment Pool 0 0.0
Short Term Investment Pool 1,169 1.2
Total Regentally Managed Funds $1,169 1.2
TOTAL ENDOWED ASSETS $98,929 100.0%
Endowment Investment Objective: All new endowment gifts are
deposited into the Foundation’s Long Term Investment Pool (LTIP),
held primarily at Goldman Sachs with State Street Bank & Trust
serving as master custodian. Endowment funds are invested in
accordance with the Uniform Prudent Management of Institutional
Funds Act (UPMIFA) and the Endowment Investment Spending
Policies and Guidelines, as adopted by the Board of Trustees.
The Foundation’s investment objects are: 1) Preserve investment
capital and its purchasing power; 2) Generate sufficient resources
to meet spending needs (payouts); and 3) Attain reasonable capital
appreciation through prudent acceptance of risk to enhance the
future purchasing power of the investment capital.
Endowment Spending Policy: The UC Santa Barbara Foundation
adopted UMIFA at the Board meeting in October 1997.In February
2009, the Board adopted UPMIFA. At their February 2008 Board
meeting, the Foundation adopted a total return spending policy
for the 2009-2010 Fiscal Year of 4.75% of the 60-month rolling
average share value as of December 31, 2008, for the Long Term
Endowment Pool/General Endowment Pool.
Policy for Gift Fees and Administrative Expenses: During fiscal
year 2009-10, the Santa Barbara campus did not assess a one-time
fee on the initial value of all gifts made to either the Foundation
or The Regents. The campus implemented a 2% one-time fee
on the initial value of all gifts made to either the Foundation or
The Regents effective July 1, 2010. During fiscal year 2009-10,
the campus charged an Endowment Cost Recovery fee of 0.45%
based upon the market value of the Foundation’s (and The
Regents’) endowment funds that was used to partially offset the
direct operating costs of managing the endowment. During fiscal
2009-10, the campus assessed all STIP interest earned on the
expendable balances of gift and private grant funds held by both
the Foundation and the campus. All of these recurring charges
were used to provide funding for centrally managed fundraising
and related operations.
0%
20%
40%
60%
80%
100%
2006 2007 2008 2009 2010
Managed Endowment Funds by Asset Class
as of June 30
U.S. Equity U.S. Fixed Income
Non-U.S. Equity Non-
U.S. Fixed Income
Alternative Equity Absolute Return
Cash
35
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
UC Santa Barbara Foundation
Annual Endowment Returns for Years Ending June 30
1
UC Santa Barbara Foundation, Foundation Benchmark and GEP
Ten-Year Performance of a $10,000 Gift
UC Santa Barbara Foundation, Foundation Benchmark and GEP
1
UCSB Endowments were invested 60% in the High Income Pool through 2000.
2
The UCSB Foundation’s net total return data excludes Other Endowed Assets for all periods.
Ending Values 2010 Annualized Returns 2001-2010
Santa Barbara Benchmark GEP Santa Barbara Benchmark GEP
$12,243 $13,900 $13,467 2.0% 3.3% 3.0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Santa Barbara
2
-6.7% -9.4% 5.6% 14.1% 10.1% 11.5% 20.1% -9.0% -22.0% 15.0%
Benchmark -5.9 -7.7 5.0 14.6 9.5 11.1 18.1 -4.0 -18.3 18.3
GEP -6.9 -9.5 5.4 14.7 10.3 11.5 19.8 -1.5 -18.2 11.3
-30%
-20%
-10%
0%
10%
20%
30%
$5,000
$15,000
$25,000
$35,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Santa Barbara Benchmark GEP
36
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
U.C. Santa Cruz Foundation
6/30/10 % Endowment
Market Value Funds
($ 000)
ENDOWED ASSETS
Regentally Managed Funds
General Endowment Pool $46,245 98.5%
Short Term Investment Pool 709 1.5
Total Regentally Managed Funds $46,954 100.0%
Cash in Operating (unprocessed gifts) $14 0.0
TOTAL ENDOWED ASSETS $46,968 100.0%
Endowment Investment Objective: The UC Santa Cruz
Foundation’s investment objective for its endowment
portfolio is to maximize long-term total return with a
prudent level of risk, to provide inflation protection through
reinvestment of an appropriate level of realized and unrealized
earnings, and to maximize the real rate of return over the
long term. The investment policy matches that of the General
Endowment Pool.
Endowment Spending Policy: The UC Santa Cruz Foundation
endowment expenditure rate is 4.5% times a three-year
moving average of June 30 market values. The endowment
expenditure formula is reviewed annually and adjusted
accordingly with respect to prudent concern for campus
needs, donor expectations, and current market conditions.
In no event will the corpus be reduced below the amount
of the original gift, adjusted by the Gross Domestic Product
(GDP) price index, unless specific language of the endowment
agreement so allows.
Policy for Gift Fees and Administrative Expenses: The UC
Santa Cruz Foundation allocates STIP earnings to uninvested
endowment balances when it is earned. The UCSC campus
assesses a gift fee of 3% of initial value of endowment gifts and
5% of initial value of current use gifts. Of the 4.5% endowment
expenditures, .3% is allocated for administrative expenses of
the Foundation.
0%
20%
40%
60%
80%
100%
2006 2007 2008 2009 2010
Managed Endowment Funds by Asset Class
as of June 30
U.S. Equity U.S. Fixed Income
Non-U.S. Equity Non-U.S. Fixed Income
Alternative Equity Absolute Return
Cash Real Estate
37
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
Ending Values 2010 Annualized Returns 2001-2010
Santa Cruz Benchmark GEP Santa Cruz Benchmark GEP
$13,559 $14,207 $13,467 3.1% 3.6% 3.0%
U.C. Santa Cruz Foundation
Annual Endowment Returns for Years Ending June 30
U.C. Santa Cruz Foundation, Foundation Benchmark and GEP
Ten-Year Performance of a $10,000 Gift
U.C. Santa Cruz Foundation, Foundation Benchmark and GEP
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Santa Cruz
1
-6.7% -9.1% 5.4% 14.5% 10.3% 11.3% 19.5% -1.4% -17.7% 11.3%
Benchmark -5.9 -7.7 5.0 14.6 9.5 11.1 18.1 0.0 -13.1 9.1
GEP -6.9 -9.5 5.4 14.7 10.3 11.5 19.8 -1.5 -18.2 11.3
1
The Santa Cruz Foundation’s net total return data excludes Other Endowed Assets for all periods.
$5,000
$15,000
$25,000
$35,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Santa Cruz Benchmark GEP
-30%
-20%
-10%
0%
10%
20%
30%
38
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
The General Endowment Pool (GEP), established in 1933 and
unitized in 1958, is The Regents’ primary investment vehicle for
endowed gift funds. GEP is a balanced portfolio of equities and fixed-
income securities in which all Regental endowment funds participate,
unless payout needs require otherwise.
In March 1998, GEP payout policy moved from income-only
to a set expenditure rate. In May 2009, The Regents approved the
continuance of a rate of 4.75% for expenditure in fiscal year 2009-
2010. The average annual unit value total return for GEP for the
10-year period ending June 30, 2010, was 3.01%.
Investment Strategy
The Regents adopted the following asset allocation policy effective
April 2010:
Asset Class Current Minimum Maximum
Policy
Public Equity 45.5% 35.5% 55.5%
Public Fixed Income 18.0 13.0 23.0
All Alternatives* 36.5 26.5 46.5
Liquidity 0.0 0.0 10.0
The asset allocation benchmarks and portfolio guidelines are
designed to manage risk and ensure portfolio diversification. The
benchmarks for the individual asset classes are: Russell 3000 Tobacco
Free (TF) Index for U.S. Equity; MSCI World Index ex-U.S. TF (Net)
Index for Non-U.S. Equity-Developed Markets; MSCI Emerging
Markets (Net) Index for Non-U.S. Equity-Emerging Markets; MSCI All
Country World Index Net Investable Market Index (IMI) TF for Global
Equity; Barclays Aggregate Bond Index for U.S. Core Fixed Income;
Merrill Lynch High-Yield Cash Pay Index for High Yield Fixed Income;
JP Morgan Emerging Market Bond Index–Global Diversified for
Emerging Market Fixed Income; Barclays Capital TIPS Index for TIPS;
HFRX Absolute Return Index and HFRX Market Directional Index
for Absolute Return; Real Estate Public: Public: FTSE EPRA NAREIT
U.S. Index and FTSE EPRA NAREIT Global ex-U.S. Index and Private:
NCREIF Funds Index-Open-End Diversified Core Equity. The Real
Assets benchmark includes
Timberland, Energy, Infrastructure,
Opportunistic Benchmarks: Internal Rate of Return (IRR)-Based
Benchmark and Commodities: S&P GSCI Reduced Energy Index.
For the Opportunistic benchmark, the Regents’ general investment
consultant will establish an appropriate individual benchmark after
the investment is chosen but before funding the investment.
Long-
term Private Equity portfolio returns will be compared to investable
public-equity alternatives as well as non-investable peer group indices.
There is no appropriate market benchmark to use for short-term
Private Equity performance evaluation or decision making. The total
fund benchmark is a policy-weighted average of the individual asset-
class benchmarks.
During the 2009-2010 fiscal year, a Real Assets and
Opportunitistic portfolio were added to the GEP portfolio. The
current GEP Investment Policy Statement is available on the
Treasurer’s Office website (http://www.ucop.edu/treasurer/invpol/
GEP_investment_policy.html).
Asset Mix
The following represents GEP’s asset mix as of each of
the past five fiscal-year ends.
The General Endowment Pool (GEP)
*Including, but not limited to: Real Estate, Private Equity, Real Assets,
Opportunistic, and Absolute Return Strategies
0%
20%
40%
60%
80%
100%
2006 2007 2008 2009 2010
Managed Endowment Funds by Asset Class
as of June 30
U.S. Equity U.S. Fixed Income
Non-U.S. Equity Non-
U.S. Fixed Income
Alternative Equity Absolute Return
Cash Real Estate
39
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
Asset Designation by Campus and Purpose
A donor has two avenues for making a gift to or establishing
an endowment at the University: either directly to The Regents for
a specific campus and/or purpose, or directly to a campus through
its Foundation. The campus Foundation trustees have discretion
in their choice of investment managers and may use the Treasurer’s
Office or external investment managers.
The Regents’ endowment pools include assets that were gifted
directly to The Regents, as well as Foundation assets where the
Treasurer was retained as the investment manager. The chart below
illustrates the breakdown of GEP’s assets among the campuses. Not
surprisingly, a higher proportion of the assets is dedicated to the
older campuses, which have a more established alumni and donor
base. Development efforts at the younger campuses aim to leverage
the growth of their alumni base, as well as cultivate donors.
*
University of California Office of the President (UCOP) administered
programs and multi-campus gifts.
GEP Assets Designated by Campus
June 30, 2010
The General Endowment Pool (GEP)
0%
5%
10%
15%
20%
25%
30%
35%
Berkeley UCLA UCOP and
Related
Groups*
San
Francisco
Davis San Diego Santa
Barbara
Santa Cruz Irvine Riverside Merced
40
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
The General Endowment Pool (GEP)
Annual Endowment Returns for Years Ending June 30
GEP and Benchmark
Ten-Year Performance of a $10,000 Gift
GEP and Benchmark
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
GEP* -6.9% -9.5% 5.4% 14.7% 10.3% 11.5% 19.8% -1.5% -18.2% 11.3%
Benchmark -5.9 -7.7 5.0 14.6 9.5 11.1 18.1 0.0 -13.1 9.1
Ending Values 2010 Annualized Returns 2001-2010
GEP Benchmark GEP Benchmark
$13,467 $14,207 3.0% 3.6%
* Unit value total return.
$5,000
$15,000
$25,000
$35,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Benchmark GEP
-20%
-10%
0%
10%
20%
30%
41
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
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42
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
X
X. 10-Year Historical Performance
Returns shown above prior to 2006 were provided by the individual Foundations. Returns for 2006 and later were provided by State Street Bank,
except in extraordinary circumstances.
Table 10
10-Year Foundation Investment Performance
(periods ending June 30)
Annual Total Returns - Foundations
Year Berkeley Davis Irvine
Los
Angeles
Merced Riverside San Diego
San
Francisco
Santa
Barbara
Santa
Cruz
Regents’
GEP
2010 11.7% 11.3% 11.0% 11.8% 11.3% 15.8% 12.7% 14.4% 15.0% 11.3% 11.3%
2009 -20.6 -17.9 -20.6 -21.1 -18.2 -22.1 -20.5 -16.5 -22.0 -17.7 -18.2
2008 -0.3 -1.4 -2.9 0.1 -1.5 2.8 -1.5 -7.5 -9.0 -1.4 -1.5
2007 20.3 19.7 18.7 17.8 19.8 21.7 19.3 18.2 20.1 19.5 19.8
2006 14.8 11.3 10.9 12.9 11.5 14.2 11.7 11.3 11.5 11.3 11.5
2005 11.3 10.2 7.7 10.2 10.3 11.3 10.2 10.1 10.1 10.3 10.3
2004 17.7 14.4 15.6 15.2 14.7 18.1 14.5 17.2 14.1 14.5 14.7
2003 3.4 5.5 6.5 4.5 5.4 4.1 5.2 0.9 5.6 5.4 5.4
2002 -4.8 -8.3 -7.2 -8.9 -9.5% -4.1 -9.5 -6.8 -9.4 -9.1 -9.5
2001 -5.0 -5.6 -3.4 -1.3 -6.9% 0.5 -6.9 -1.5 -6.7 -6.7 -6.9
Average Annualized Total Returns - Foundations
Year Berkeley Davis Irvine
Los
Angeles
Merced Riverside San Diego
San
Francisco
Santa
Barbara
Santa
Cruz
Regents’
GEP
2010 11.7% 11.3% 11.0% 11.8% 11.3% 15.8% 12.7% 14.4% 15.0% 11.3% 11.3%
(‘09-’10) -5.8 -4.4 -6.1 -6.0 -4.6 -5.0 -5.3 -2.3 -5.3 -4.3 -4.6
(‘08-’10) -4.0 -3.4 -5.1 -4.1 -3.6 -2.5 -4.1 -4.0 -6.6 -3.3 -3.6
(‘07-’10) 1.5 1.9 0.4 1.0 1.8 3.1 1.3 1.1 -0.5 1.9 1.8
(‘06-’10) 4.1 3.7 2.4 3.3 3.7 5.2 3.3 3.1 1.8 3.7 3.7
(‘05-’10) 5.2 4.8 3.3 4.4 4.8 6.2 4.4 4.2 3.1 4.8 4.8
(‘04-’10) 6.9 6.1 4.9 5.9 6.1 7.8 5.8 6.0 4.6 6.1 6.1
(‘03-’10) 6.5 6.0 5.1 5.7 7.3 5.7 5.3 4.7 6.0 6.0
(‘02-’10) 5.2 4.3 3.7 4.0 4-.2% 6.0 3.9 3.9 3.1 4.2 4.2
(‘01-’10) 4.1 3.3 2.9 3.4 3-.0% 5.4 2.8 3.3 2.0 3.1 3.0
Cumulative Total Returns - Foundations
Year Berkeley Davis Irvine
Los
Angeles
Merced Riverside San Diego
San
Francisco
Santa
Barbara
Santa
Cruz
Regents’
GEP
2010 11.7% 11.3% 11.0% 11.8% 11.3% 15.8% 12.7% 14.4% 15.0% 11.3% 11.3%
(‘09-’10) -11.3 -8.6 -11.9 -11.7 -8.9 -9.8 -10.3 -4.5 -10.4 -8.4 -8.9
(‘08-’10) -11.6 -9.9 -14.5 -11.7 -10.3 -7.3 -11.7 -11.6 -18.5 -9.7 -10.3
(‘07-’10) 6.3 7.9 1.5 4.1 7.5 12.9 5.3 4.5 -2.1 8.0 7.5
(‘06-’10) 22.1 20.1 12.5 17.5 19.9 28.9 17.6 16.3 9.2 20.1 19.9
(‘05-’10) 35.9 32.4 21.1 29.5 32.2 43.4 29.6 28.0 20.2 32.5 32.2
(‘04-’10) 60.0 51.5 40.0 49.1 51.7 69.4 48.4 50.0 37.2 51.7 51.6
(‘03-’10) 65.4 59.8 49.1 55.9 59.8% 76.3 56.2 51.4 44.8 59.9 59.8
(‘02-’10) 57.5 46.6 38.4 42.0 44.7% 69.1 41.3 41.1 31.2 45.3 44.7
(‘01-’10) 49.6 38.4 33.7 40.1 34.7% 69.9 31.6 38.9 22.4 35.6 34.7
43
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
1
Arithmetic difference
2
Annualized geometric difference
Table 11
10-Year Benchmark and Active Performance
(periods ending June 30)
Annual Total Returns - Benchmarks
Year Berkeley Davis Irvine
Los
Angeles
Merced Riverside San Diego
San
Francisco
Santa
Barbara
Santa Cruz
Regents’
GEP
2010 10.2% 9.1% 9.2% 10.0% 9.1% 11.5% 10.7% 11.0% 18.3% 9.1% 9.1%
2009 -15.6 -13.1 -16.1 -19.0 -13.1 -19.4 -18.3 -21.9 -18.3 -13.1 -13.1
2008 -1.2 0.0 -6.4 0.6 0.0 -4.5 0.0 -6.2 -4.0 0.0 0.0
2007 16.9 18.0 19.0 17.1 18.0 20.2 18.0 17.1 18.0 18.0 18.0
2006 12.7 11.1 10.3 10.3 11.1 13.6 11.1 10.5 11.1 11.1 11.1
2005 10.3 9.5 9.3 8.7 9.5 10.4 10.3 11.1 9.5 9.5 9.5
2004 17.1 14.6 15.1 16.2 14.6 18.0 15.2 17.2 14.6 14.6 14.6
2003 2.8 5.0 3.2 3.0 5.0 2.1 5.2 4.3 5.0 5.0 5.0
2002 -8.1 -7.7 -6.6 -10.5 -7.7% -7.8 -7.7 -9.1 -7.7 -7.7 -7.7
2001 -9.5 -5.9 -6.2 -9.6 -5.9% -4.8 -5.9 -6.1 -5.9 -5.9 -5.9
Annual Active Returns (Foundation minus Benchmark)
1
Year Berkeley Davis Irvine
Los
Angeles
Merced Riverside San Diego
San
Francisco
Santa
Barbara
Santa Cruz
Regents’
GEP
2010 1.6% 2.3% 1.8% 1.8% 2.3% 4.3% 2.0% 3.3% -3.3% 2.3% 2.3%
2009 -5.1 -4.9 -4.6 -2.0 -5.1 -2.7 -2.1 5.4 -3.7 -4.7 -5.1
2008 0.9 -1.3 3.4 -0.5 -1.5 7.3 -1.5 -1.3 -5.0 -1.3 -1.5
2007 3.4 1.7 -0.2 0.7 1.7 1.5 1.2 1.2 2.0 1.5 1.8
2006 2.2 0.3 0.6 2.6 0.5 0.6 0.6 0.7 0.4 0.2 0.4
2005 1.0 0.8 -1.6 1.4 0.9 0.9 -0.1 -1.1 0.7 0.8 0.9
2004 0.6 -0.2 0.5 -1.0 0.1 0.1 -0.7 0.1 -0.5 -0.1 0.1
2003 0.6 0.5 3.3 1.5 0.4 2.0 0.0 -3.4 0.6 0.4 0.4
2002 3.3 -0.6 -0.6 1.6 -1.8% 3.7 -1.8 2.3 -1.7 -1.4 -1.8
2001 4.5 0.3 2.8 8.3 -1.0% 5.3 -1.0 4.6 -0.8 -0.8 -1.0
Average Annualized Active Returns (Foundation minus Benchmark)
2
Year Berkeley Davis Irvine
Los
Angeles
Merced Riverside San Diego
San
Francisco
Santa
Barbara
Santa Cruz
Regents’
GEP
2010 1.4% 2.1% 1.6% 1.6% 2.1% 3.9% 1.8% 3.0% -2.8% 2.1% 2.1%
(‘09-’10) -2.4 -1.8 -2.0 -0.5 -2.0 0.2 -0.4 5.0 -3.7 -1.7 -2.0
(‘08-’10) -1.3 -1.7 -0.1 -0.5 -1.8 2.6 -0.8 2.8 -4.2 -1.6 -1.8
(‘07-’10) -0.3 -0.9 -0.1 -0.2 -1.0 2.3 -0.3 2.4 -2.8 -0.9 -1.0
(‘06-’10) 0.2 -0.7 -0.0 0.3 -0.7 1.9 -0.2 2.0 -2.1 -0.7 -0.7
(‘05-’10) 0.3 -0.4 -0.3 0.5 -0.5 1.7 -0.1 1.5 -1.7 -0.4 -0.5
(‘04-’10) 0.3 -0.4 -0.2 0.3 -0.4 1.5 -0.2 1.3 -1.5 -0.4 -0.4
(‘03-’10) 0.4 -0.3 0.3 0.4 -0.3 1.6 -0.2 0.7 -1.2 -0.3 -0.3
(‘02-’10) 0.7 -0.3 0.2 0.6 -0.5% 1.8 -0.4 0.9 -1.3 -0.4 -0.5
(‘01-’10) 1.1 -0.3 0.4 1.4 -0.5% 2.2 -0.4 1.3 -1.3 -0.5 -0.5
44
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
XI
XI. Supplemental
The chart above compares the investment return for each Foundation with its benchmark, for the entire
10-year period June 2000–June 2010 (Merced uses GEP for full period). This information answers two questions:
how well did the Fund perform relative to its stated policy, and how well did the choice of asset classes meet the
fiduciaries’ expectations for return and appetite for risk.
The chart above shows the Sharpe ratio for each Foundation and its respective benchmark, for the 10-year
period, June 2000–June 2010. This measure of risk adjusted performance divides excess return (total return in
excess of the risk free rate or cash return) by total volatility (standard deviation of returns). The results show how
well each Foundation and the GEP outperformed their respective benchmarks on a risk-adjusted basis.
(0.25)
(0.20)
(0.15)
(0.10)
(0.05)
-
0.05
0.10
0.15
0.20
0.25
Foundation and Benchmark Sharpe Ratios
for the10-year period 7/2000 - 6/2010
Foundation Sharpe Ratio
Benchmar k Sharpe Ratio
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Foundation and Benchmark Annualized Return
for the 10-year period 7/2000 - 6/2010
Foundation Return Benchmark Return
45
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
Sources: Returns prior to 2006 were provided by the individual Foundations. Returns for 2006 and later were provided by State Street Bank,
except in extraordinary circumstances. The Foundations also provided their investment policy and benchmark policy allocations, which are
summarized in Section XII. Based on this information, the Regents’ Investment Consultant computed annual benchmark returns and the
measures of risk and risk-adjusted returns shown in the charts above.
The Information Ratio, a measure of risk-adjusted active return, is shown in the graph above. It is defined as
the ratio of Active Return to Active Risk. Active return is the difference between the annual Fund return and the
Benchmark return for that year, and is here calculated as the arithmetic average of the ten one-year active returns
shown in the middle panel of Table 11 in Section X. Active risk is the volatility of active returns, and is here
calculated as the standard deviation of the 10 one-year active returns. The Information Ratio is positive (good)
if on average the fund return exceeds the benchmark over the period, and negative otherwise. It is larger (good)
if the active return was produced with some consistency, i.e., if the volatility (in the denominator) is lower.
Note: As the second and third charts were computed with annual, rather than monthly returns (as is customary), they present
approximations of risk and risk-adjusted returns.
(0.60)
(0.40)
(0.20)
-
0.20
0.40
0.60
0.80
1.00
Information Ratio
for the 10-year period 7/2000 - 6/2010
46
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
XII
XII. Investment Policies as of June 30, 2010
Asset Class Benchmark Component Percentage
UC Berkeley
U.S. Equity Russell 3000 16.3%
Non-U.S. Equity
MSCI EAFE 15.3
MSCI EMF 7.0
Marketable Alternatives 91-Day T-Bill + 5% 20.0
Private Equity/Venture Capital Benched against itself 11.5
Private Real Estate Benched against itself 0.7
Private Energy/Commodities Benched against itself 1.4
Real Estate
Dow Jones-Wilshire REIT 2.0
FTSE/EPRA NAREIT GLOBAL RE 1.3
Energy/Commodities/Other
DJAIGTR 1.5
MSCI World Natural Resources 3.1
U.S. Fixed Income
Barclays Capital Aggregate 2.0
BC 3-10-Year Treasury 10.0
Global Fixed Income Citigroup World Govt Bond 3.0
Cash T Bill 5.0
Total 100.0%
UC Davis
GEP GEP Benchmark 100.0%
Total 100.0%
UC Irvine
U.S. Equity Russell 3000 22.0%
Non U.S. Equity MSCI EAFE 22.0
Private Equity Russell 3000 + 3% 8.0
Hedge Funds HFRI Fund of Funds Index 20.0
Commodities DJ AIG Commodity Index 5.0
Real Estate Total Property Index 8.0
US Fixed Income Barclays Capital Aggregate 15.0
Total 100.0%
UC Los Angeles
U.S. Equity Russell 3000 13.0%*
Non-U.S. Equity MSCI World ex U.S. 14.0*
Private Equity Actual PE Returns 23.0*
Real Estate NCREIF 7.0*
Absolute Return HFRX Absolute Return 32.0*
Fixed Income Barclays Capital Aggregate 11.0*
Total 100.0%
UC Merced
GEP GEP Benchmark 100.0%
Total 100.0%
UC Riverside
Global Equity MSCI AC World 71.0%
Fixed Income Barclays Capital Aggregate 29.0
Total 100.0%
* Percentages represent targeted holdings, the Benchmark applied is based on actual asset class mix.
47
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
Asset Class Benchmark Component Percentage
UC San Diego
U.S. Equity
S&P 500 16.0
Russell 2500 8.0
Non-U.S. Equity
MSCI ACWI ex-U.S. 17.0
MSCI Emerging Mkts Index 5.0
Private Equity S&P 500 + 5% 7.0
Absolute Return HFN FOF Multi-Strat. Index 20.0
Real Estate NCREIF Property Index 10.0
Fixed Income
Barclays Capital U.S. Aggregate Bond Index 10.0
Consumer Price Index + 5%
7.0
Total
100.0%
UC San Francisco
U.S. Equity Russell 3000 20.0%
Non-U.S. Equities MSCI All Country World ex USA 20.0
Hedge Funds 8% Return (Hedge Funds) 25.0
Private Equity S&P 500 + 7% (Private Equity) 7.5
REITS NAREIT 7.5
U.S. Fixed Income Barclays Capital Aggregate 20.0
Total
100.0%
UC Santa Barbara
U.S. Equity S&P 500 21.0%
Non-U.S. Equity Developed MSCI World Ex-U.S. (Net) 13.0
Emerging Market Equity MSCI Emerging Markets (Net) 6.0
Fixed Income
Barclays Capital Aggregate 13.0
Barclays Capital High Yield 5.0
Absolute Return Libor + 4.5% 16.5
Inflation Hedge NAREIT All Share Price Index 16.0
Private Equity Russell 3000 + 3% 9.5
Total
100.0%
UC Santa Cruz
GEP GEP Benchmark 100.0%
Total
100.0%
GEP
U.S. Equity Russell 3000 Tobacco Free Index 20.0%
Non-U.S. Equity Developed MSCI World ex-U.S. Net Tobacco Free 18.5
Emerging Market Equity MSCI Emerging Market Free Net 5.0
Global Equity MSCI All Country World Index Net – IMI – Tobacco Free 2.0
U.S. Core Fixed Income Barclays Capital Aggregate Bond Index 8.0
High Yield Debt Merrill Lynch High Yield Cash Pay Index 3.0
Emerging Market Debt JP Morgan Emerging Market Bond Index – Global Diversified 3.0
TIPS Barclays Capital TIPS Index 4.0
Absolute Return 50% x HFRX Absolute Return Index + 50% HFRX Market Directional Index 23.5
Real Assets
Timberland, Energy, Infrastructure, Opportunistic Benchmarks: Internal
Rate of Return (IRR)-Based Benchmark; Commodities: S&P GSCI Reduced
Energy Index
0.5
Opportunistic
The Regents’ general investment consultant will establish an appropriate
individual benchmark after the investment is chosen but before funding the
investment
0.5
Private Equity Actual return of private equity portfolio 7.0
Real Estate
Public: 50% times the FTSE EPRA NAREIT U.S. Index plus 50% times the
FTSE EPRA NAREIT Global ex-U.S. Index. Private: Open End = NCREIF
Funds Index–Open-End Diversified Core Equity (lagged three months);
Closed End = Actual Closed End Return
5.0
Total
100.0%
48
UC Annual Endowment Report
Fiscal Year Ended June 30, 2010
XIII
XIII. Glossary
Endowment Assets: True endowments, established by donor-restricted gifts to provide a permanent source of income,
and Funds Functioning as Endowments (FFEs), established by donor-restricted gifts to provide income but principal
may also be expended.
Trusts/Life Annuities: Assets donated by individuals or organizations, with the institution agreeing to pay a specific level
of income to the donor, or designated beneficiary, for his or her lifetime. Subsequent to the beneficiary’s death, the
institution gains complete ownership of the donated assets. The donor may or may not have restricted the assets’
purpose.
Current Assets: Assets for use in the near term to support the overall operations of the Foundation, where the donor may,
or may not, have restricted their use. These assets typically include cash, accounts receivable, notes receivable, de-
ferred charges, amounts due, prepaid expenses, etc.
In accordance with the Support Group Policy, endowed gifts or restricted assets must be transferred to the University
to be spent in accordance with the donors’ terms. However, the existing policy does not specify the timing and/or
frequency of transfers. Consequently, the timing/frequency decision varies among the Foundations.
Non-Endowed Assets: Current gift and trust/life income assets, excluding pledges.
Other Endowed Assets: Separately invested assets, mortgages, real estate, and receivables.
