University of Minnesota Foundation Investment Advisors
Professional oversight of U of M Foundation investments is managed by University of Minnesota Foundation Investment Advisors (UMFIA).
Professional oversight of U of M Foundation investments is managed by University of Minnesota Foundation Investment Advisors (UMFIA), a nonprofit subsidiary formed in 1998 to provide full-time, professional investment management to the U of M Foundation on a cost-effective basis. UMFIA has a staff of 12 and its own UMFIA board of directors that includes representation from the UMF Board of Trustees as well as from UMF leadership.
Investing the endowment
Goals and strategy
Endowed funds at the University of Minnesota Foundation are managed to provide reliable and meaningful support for their designated programs today, tomorrow, and in perpetuity.
The endowment’s investment objective is to generate returns that meet or exceed the rate of inflation plus the rate of spending. The objective implies a return target of approximately inflation plus 5%, which is consistent with long-run stock market returns and requires an aggressive investment portfolio. While the return objective is ambitious, the ongoing spending from endowment funds requires a consistency of returns over horizons of five years or more, which is not reasonable to expect from stock markets. Prolonged periods of stagnant returns risk depleting the endowment’s principal. Therefore, both the level and the stability of investment returns are critical.
To consistently achieve equity-like rates of return, UMF’s endowment portfolio is managed by UMFIA to diversify fundamental exposures to market downturns. UMF’s endowment returns will typically not experience the stock market’s highest highs or its lowest lows, but UMF endeavors to generate a return that is competitive with stock market returns, such as the S&P 500, in the long run, while experiencing the return volatility of a more diversified portfolio, such as the 65/35 market benchmark.
UMFIA diversifies the risk of public stock markets, but embraces the use of low-cost investment methods, and cautiously seeks active management opportunities. With fewer investments in widely adopted alternative investments, the endowment’s year-to-year results will vary from the returns of other large university endowments.
View the most recent UMF quarterly endowment report.