The University is highly cash generative and while funds are earmarked for specific investments we can find we are holding very large sums of cash for anything up to five years mainly because capital projects extend over several years and timings have to be balanced against other building work on the campus. The University has therefore established a University Investment Fund alongside its existing Long Term Endowment Fund.
The University’s Long Term Endowment Fund is separate from the University Investment Fund, as it invests the following types of endowments:
- Unrestricted permanent endowments – the donor has specified that the fund is to be permanently invested and generate an income stream for the general benefit of the University;
- Restricted expendable endowments – the donor has specified a particular objective other than fixed assets and the University has the power to use capital over the medium term;
- Restricted permanent endowments – the donor has specified that the fund is to be permanently invested to generate an income stream to be applied to a particular objective.
University of Birmingham Investment Funds’ Asset Allocation as at 31st March 2020
A number of external investment managers oversee the investment funds of the University, working to agreed investment mandates. In developing these mandates the University sets a fundamental guiding principle that managers must apply investment criteria based on environmental, social and governance (ESG) standards. As part of our selection process, we require fund managers to confirm that they have robust ESG policies in place. During our regular performance review of our fund managers, we consider their application of ESG policies in making investment decisions.