Arial view of Fort Garry campus contruction on Admin building

Purpose of the endowment

June 2020

The University Investment Trust (endowment fund) is a permanent fund established to support specific purposes at the University of Manitoba. Each year, a portion of the investment return is used to support current year programs and therefore contributes to the quality of teaching, student accessibility, research, athletics, and public service at the university.

Each individual endowed account is pooled for investment purposes and tracked using unit accounting, similar to a mutual fund. The unitized pool is referred to as the University Investment Trust (“UIT”), and the use of a pooled fund concept ensures new gifts purchase units and receives a pro-rata share of earnings while existing account holders maintain their equitable ownership in the pool. The pooled fund concept also allows all endowment account holders to take advantage of the diversification benefits available to large institutional investors like the University of Manitoba.

The endowment is managed by the Trust Investment Committee (the Committee), which is an advisory committee to the Board of Governors, and as such makes recommendations on all matters related to the investment and distribution of endowment assets. Members of the Committee are appointed under the authority of the Board, and are accountable to the Board through the Finance, Administration and Human Resources Committee. The Committee establishes guidelines for investing assets and is responsible for hiring and reviewing investment managers. This includes establishing the investment mandates for each asset class and the review of performance for each mandate, as well as the overall portfolio, to ensure the goals and objectives of the endowment are being achieved.

The endowment fund is comprised primarily of gifts from donors to provide long-term funding for designated purposes. Donors generally specify a particular purpose for their gifts, creating endowments that fund faculty and school support (29 per cent), student awards (42 per cent), chairs and professorships (14 per cent), research (six per cent), library support (three per cent) and various other areas (six per cent). The annual distributions from the endowment fund provide for this support, with $31.4 million being allocated for the current year, and a total of $129 million allocated over the past five years.

Governance and management of funds

The University of Manitoba
Management of trust and endowment funds
October 2021

Governance

A Trust Investment Committee was established many years ago and has general authority over the investment of the assets of the Trust and Endowment Fund. This includes the investments of the University Investment Trust (the “UIT”) and the Specific Trusts.  Members of the Trust Investment Committee are appointed under the authority of the Board of Governors. The Board’s power includes the power to ensure the investment of University money based on prudent person principles. The Finance, Administration and Human Resources Committee is a Board Committee established under the Board of Governors, and this Committee makes recommendations to the Board on the general investment policy and the management of University investments.

The Trust Investment Committee is accountable to the Board of Governors through the Finance, Administration, and Human Resources Committee. The Chair of the Trust Investment Committee is Vice President (Administration), who also is a non-voting member of the Finance, Administration and Human Resources Committee.

The current membership of the Trust Investment Committee is as follows: 

University Staff and Members of the Board of Governors

  • Naomi Andrew, Vice-President Administration, Chair
  • Michael Benarroch, President and Vice Chancellor
  • Carla Buchanan, Manager, Financial Services
  • Robin Campbell, Manager, Treasury
  • Michael Emslie, CFO and Comptroller
  • Kathryn Lee, Board of Governors
  • Jeff Lieberman, Board of Governors
  • Lance McKinley, Director, Treasury
  • Todd Mondor, Deputy Provost

Community Members

  • Zoe Richardson, investment professional
  • John Smith, retired, President, GLC Asset Management
  • Garry Steski, retired, ADM, Treasury Division, Province of Manitoba

Investment Policy Statement

The Investment Policy Statement (IPS) (PDF) is the governing document of the Committee, and all content and changes to the IPS are done through approval by the Board of Governors. The current IPS was approved by the Board on September 29, 2020. The IPS covers: roles and responsibilities; investment objective; time horizon; risk tolerance; asset allocation; rebalancing guidelines; spending policy; selection and retention for investment managers; strategic investment guidelines and constraints; and conflict of interest.

The endowment fund is a permanent fund established to support specific purposes at the University of Manitoba. Each year, a portion of the investment return is used to support current year programs and therefore contributes to the quality of teaching, student accessibility, research, athletics, and public service at the university. The fund is currently comprised of over 2,600 individual accounts, each with a specific purpose.

Each individual endowed account is pooled for investment purposes and tracked with unit accounting, similar to a mutual fund. The unitized pool is referred to as the University Investment Trust (UIT), and the use of a pooled fund concept ensures new gifts purchase units and receive a pro-rata share of earnings while existing account holders maintain their equitable ownership in the pool. The pooled fund concept also allows all endowment account holders to take advantage of the diversification benefits available to large institutional investors like the University of Manitoba.

The basic investment objective of the UIT is to provide a total investment return (income plus capital appreciation) necessary to meet annual spending requirements and to preserve, in real dollar terms, the capital of the UIT. This objective is achieved by ensuring that the annual distribution of income for spending purposes does not exceed the real rate of return (total investment return less inflation) over a period of years. To ensure that this is the case, the spending policy is subject to an annual re-evaluation by the Vice-President (Administration) on the advice of the Committee. Growth in capital, as opposed to preservation of capital, is made possible in two ways. When beneficiary faculties and schools, libraries and support units choose to spend less than their annual distribution, their unspent funds remain as part of their endowment. Further, if the real rate of return exceeds spending over the long term, real growth in capital is experienced. When a beneficiary unit spends less than its allocation, unspent funds are automatically capitalized to the endowment accounts at the end of each year.

Investment Policy Statement (IPS) (PDF)

The specific trusts

The Specific Trusts are earmarked for funds received which will be expended over the short term (< 1 year) such as for major building projects or for funds in support of emergency student loans, where the fund balance is supported all or in part by a receivable and not cash.  They include trust funds which may be endowments but which cannot be pooled for investment purposes because of restrictive conditions imposed by the original donor.  They may include gifts received in kind such as real estate which may be held, subject to the approval of the Vice-President (Administration) on the advice of the University’s Gift Acceptance Committee.  They may also include gifts of interest-bearing securities which are being held to maturity, if the interest rate is favourable given current market conditions or the donor has requested that it be held to maturity.

The Investment Policy Statement also governs the Specific Trust investments. The primary investment objective of the Specific Trusts is the protection (safety) of capital and/or the selection of maturities that will be appropriate for anticipated cash flow needs, such as for building projects and loans. The Committee, as a result, has determined that Specific Trust investments will be limited to fixed income securities, unless a donor specifically wants equities in the portfolio.

Permitted investments include short-term securities, which are restricted to Canadian and provincially-backed debt instruments, short term debt instruments issued by Canadian chartered banks, promissory notes and commercial paper; mid to long-term securities; Canadian money market and bond pooled funds. These investments provide safety of capital and through the selection of appropriate durations, the required liquidity. Income producing real estate, which is donated to the University, may also be held for long term strategic purposes.