The University of California’s Office of the Chief Investment Officer announced today (Sept. 25) that its assets under management grew to $118.7 billion as of June 30, 2018, an $8.9 billion increase over a year ago.
UC’s $118.7 billion is spread across six unique financial products. The endowment ended the fiscal year at $12.3 billion, the pension at $66.8 billion, working capital at $14.4 billion (total return at $9.3 billion and short term at $5.1 billion), the retirement savings program at $24.3 billion, and captive insurance at $0.9 billion.
“Since I arrived at UC, we have taken a conservative and defensive risk positioning while seeking a wider range of investment opportunities,” said Chief Investment Officer Jagdeep Singh Bachher, who joined the university in April 2014. “The team and I have focused on deepening our 100 active partner relationships with every facet of the university and beyond. A culture of collaboration is our ultimate competitive advantage.”
Said UC President Janet Napolitano, “The UC investments office has kept a close eye on costs while continuing to deliver the strong investment results we seek.”
The UC endowment grew 8.9 percent for the fiscal year ending June 30, 2018. The endowment has earned 6.5 percent over 3 years, 8.8 percent over 5 years, 6.4 percent over 10 years, and 6.7 percent over 20 years. Over the past four years the endowment has earned $157 million above the market gains of $1.3 billion.
The UC pension gained 7.8 percent for the fiscal year ending June 30, 2018. The pension has earned 6.5 percent over 3 years, 8.2 percent over 5 years, 6.4 percent over 10 years, and 6.0 percent over 20 years. It gained $1.2 billion over the market gains of $7.6 billion since 2014.
The UC Total Return Investment Pool (TRIP) earned 4.5 percent for the fiscal year ending June 30, 2018. TRIP has earned 4.1 percent over 3 years, 5.8 percent over 5 years, and 6.8 percent over 10 years. The UC Short Term Investment Pool (STIP) earned 1.7 percent for the year, 1.4 percent over 5 years, 1.4 percent over 10 years, and 3.4 percent over 20 years. Working capital added value of $361 million during the past four years.
“Our returns were solid this year,” said UC Regent Richard Sherman, chair of the Investments Subcommittee. “Returns were positively impacted by the global equity markets and we continue to have a pretty sizable exposure. We ended the year with a significant amount of cash, and though it was higher than our long-term allocation target, it effectively acts as a hedge on an equity market that was very long in the rally.
“Jagdeep and the team are making our relationships with existing managers more fruitful, saving money while moving the needle in the right direction. Compared to our peers, when you look at the $4.9 billion of funds managed per investment professional in the office, we’re at the top of the class. We’re incredibly efficient at less than 3 basis points of internal operating costs, saving billions of dollars without sacrificing results.”
Performance results will be discussed at the September 2018 meeting of the UC Board of Regents’ Investments Subcommittee. Results are available online at: http://regents.universityofcalifornia.edu/regmeet/sept18/i2.pdf