University of Cincinnati - Message Points

1. You prefer building direct relationships with external managers and allocate via actively managed pooled funds and separately managed accounts.

A boutique, owner‑managed, high‑conviction fund with a long track record fits your move away from funds‑of‑funds and your use of active pooled vehicles/SMAs.

Evidence

“migrating the portfolio from funds of funds to direct investment in funds” “Fund A (actively managed pooled investments)” “traditional long-only equity and fixed income funds ... separately managed accounts”

2. You maintain a meaningful hedge fund allocation to add diversification and accept standard hedge fund liquidity/lockup terms.

A low-correlation, high-conviction hedge fund can complement your alternatives sleeve and fits your tolerance for quarterly-plus liquidity and audited NAV reporting.

Evidence

“Fund A consists of approximately ... 10.8% hedge funds” “The hedge fund portion of the portfolio totals $156,834,000.” “This category includes investment vehicles that take both long and short positions, primarily in common stocks and credit instruments... Liquidity offered by these vehicles ranges from one quarter to 2.5 years after initial lock-ups of one to two years.”

3. You allocate globally and include dedicated international and emerging markets exposure.

A global, emerging‑markets‑capable manager with a concentrated best‑ideas approach can enhance your international/EM sleeve.

Evidence

“International equities 20% 5.16%” “Accordingly, the portfolio includes investments in domestic and non-U.S. stocks, bonds and loans;” “Index – emerging markets”

4. You emphasize long-term, real returns that support a steady 4% spending policy.

A manager with a long track record and capital preservation focus aligns with your need to compound above inflation and spending over multi‑decade horizons.

Evidence

“The primary objective is to produce long-term real growth in assets, net of administrative and investment fees, by generating a total endowment rate of return which is greater than the spending rate plus the Consumer Price Index.” “The 2024 endowment spending policy provided for an annual distribution of 4.0% of the twelve-quarter moving-average market value of endowment units.” “Investments identified as endowment are those funds invested in portfolios that are considered by management to be of a long duration.”

5. You seek managers that improve diversification and reduce correlation within the endowment.

A differentiated return stream from a concentrated, high‑conviction strategy can enhance your portfolio’s diversification objective.

Evidence

“Diversification is a fundamental risk management strategy for the endowment portfolio.” “continually increased the diversification of the Endowment’s assets.” “The underlying investments that comprise University pooled investments as of June 30 are as follows: Fund A U.S. and international equity securities 29% ... Hedge funds and private equity capital 54%”

6. You have capacity for smaller, externally managed pools alongside the internally managed A Pool.

A small‑AUM, entrepreneurial manager can fit within your smaller external pools and offer alignment and access.

Evidence

“UC's Total Endowment comprises over $2.5 billion and includes the $2.0 billion internally managed A Pool as well as several smaller externally managed endowment pools.”

7. Your oversight framework favors managers with clear style discipline, audited reporting, and transparency.

An owner‑managed fund with rigorous process, audited financials, and consistent style can align with your diligence and monitoring requirements.

Evidence

“(c) ongoing review of investment manager performance with respect to rate of return, adherence to investment style and compliance with investment guidelines.” “Audited financial statements of the underlying investments in the university pooled investments as of June 30, 2024, are used as a basis for fair value when available.” “Statements provided by the managers of the investment partnerships may lag the financial year-end close... If the June 30 statements are not available, the March 31 statements are adjusted...”