The University of California’s Office of the Chief Investment Officer announced today (Sept. 9) that the value of its assets under management remained largely unchanged over the past fiscal year, while recent gains have pushed the total beyond $100 billion.
For the fiscal year that ended on June 30, 2016, assets managed totaled $97.6 billion, including $9.1 billion for the UC endowment, $54.1 billion for the pension, $14.2 billion for working capital and $20.2 billion for retirement savings.
Public markets, in particular global equities, were volatile for the past fiscal year, weathering a series of geopolitical and policy-driven events as well as low energy prices. Long-term performance for all UC products remained strong, however, and total assets have surpassed $100 billion during the first two months of the new fiscal year.
“We are investing for the long term,” said Chief Investment Officer Jagdeep Singh Bachher. “We believe we are faced with a low-growth and low-return environment going forward and are working closely with our stakeholders to set realistic return expectations for the future. We are pleased to see the positive impact of this approach taking shape with an estimated $3 billion gain in total assets during the first two months of the new fiscal year.”
Returns for the endowment were 6.5 percent over the past 5 years and 5.9 percent over the past 10 years. The pension increased 6.1 percent over the past 5 years and 5.4 percent over the past decade, and working capital also posted positive long-term returns. The short-term investment pool increased 1.7 percent over the past 5 years and 2.7 percent over the past 10 years. Moreover, the total return investment pool returned 6.4 percent over the past 5 years and 7 percent since its inception in 2008.
In the past year, the CIO’s office launched the UC Ventures program to support the university’s innovation efforts, implemented a sustainable investing framework, and became the only institutional investor in the Breakthrough Energy Coalition, an influential investment group led by Bill Gates that is focused on climate change solutions.
“I’m pleased with our team’s focus on long-term strategic investments,” said UC Regent Richard Sherman, chair of the Committee on Investments. “I’m also glad the University of California continues to take into consideration environmental, social and governance issues in assessing financial risks within our portfolio.”
The long-term results are as follows:
Annualized Performance (%)
| As of June 30, 2016 | Market Value in Billions ($) | 1 Year | 5 Year | 10 Year | 20 Year |
| Endowment | $9.1 | -3.4 | 6.5 | 5.9 | 7.7 |
| Policy Benchmark | -1.7 | 4.9 | 5.2 | 7.3 | |
| Value Added | -1.7 | 1.6 | 0.7 | 0.4 | |
| Pension | $54.1 | -2.0 | 6.1 | 5.4 | 7.2 |
| Policy Benchmark | -0.8 | 5.5 | 4.9 | 6.9 | |
| Value Added | -1.2 | 0.6 | 0.5 | 0.3 | |
Working Capital |
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| Total Return Investment Pool | $8.9 | 0.3 | 6.4 | ||
| Policy Benchmark | 1.4 | 6.0 | |||
| Value Added | -1.1 | 0.4 | |||
| Short-term Investment Pool | $5.3 | 1.3 | 1.7 | 2.7 | 3.9 |
| Policy Benchmark | 0.6 | 0.3 | 1.3 | 2.8 | |
| Value Added | 0.7 | 1.4 | 1.4 | 1.1 | |
Retirement Savings |
$20.2 |
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Total |
$97.6 |
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Performance results were discussed at the UC Board of Regents’ Committee on Investments meeting. Results are available online at: http://regents.universityofcalifornia.edu/regmeet/sept16/i1.pdf