The endowment fund incurs expenses related to the management and safekeeping of assets. Investment management fees are paid for portfolio management and these fees make up the most significant portion of overall expenses. Custodians are paid for the safekeeping and accounting of shares held in segregated portfolios. Performance measurement fees provide third party analysis of our portfolio as compared to our contemporaries across the country. Performance analytics help track each of the three equity investment managers and allow trustees to determine if these firms are managing the portfolios consistently and in compliance with their investment philosophies and processes. Finally, there are internal administrative fees that help support the few individuals that work with the endowment on a daily basis, and also support some of the fundraisers that in turn benefit the endowment fund going forward.
The total amount of investment management fees paid in 2016 was $3,307,000 or 0.53% of the average market value of the fund over that period. The total expenses of the fund in 2016 were $4,327,000 or 0.75% of the average market value of the investments for the year. Overall, compared to similar sized endowment funds and foundations, the fee structure is favorable, and the trustees are committed to ensuring that controlling costs is an important objective in the decision making process.