Foundation Investment Disclosure

In compliance with Texas Government Code, the South Plains College Foundation prepares an Annual Investment Report of its assets. Oversight of Foundation investments is the general responsibility the Foundation Board of Directors and the Finance and Investment Committee in accordance with an adopted Investment Policy.

The SPC Foundation engages the following investment companies as financial advisors and managers. The Foundation maintains a discretionary investment agreement with these investment companies within the parameters of the Investment Policy.

Commonfund
15 Old Danbury Road
P.O. Box 812
Wilton, CT 06897-0812
(230) 563-5091

Merrill Lynch Wealth Management
1901 University Ave. First Floor
Lubbock, TX 79410
(806) 741-4011

Edward Jones Investments
8004 Quaker Ave., Suite B
Lubbock, TX 79424
(806) 796-0233

The SPC Foundation does not use soft dollar arrangements.

The market value of the SPC Foundation investments as of August 31, 2013 is $14,856,900.50.

For information regarding the management of the SPC Foundation investments, contact: Stephen S. John, Executive Director, South Plains College Foundation, 1401 S. College Ave., Levelland, TX 79336. (806) 716-2217. Email: sjohn@southplainscollege.edu

South Plains College Foundation Investment Report

To download a copy of the SPC Foundation's Annual Investment Report, click on the appropriate link below.

Annual Investment Report, August 31, 2013 (PDF Document)

Annual Investment Report, August 31, 2012 (PDF Document)

Annual Investment Report, August 31, 2011 (PDF Document)

Annual Investment Report, August 31, 2010 (MS Word Document)

Annual Investment Report, August 31, 2009 (MS Word Document)

Annual Investment Report, August 31, 2008 (MS Word Document)

Annual Investment Report, August 31, 2007 (MS Word Document)

 

South Plains College Foundation Investment and Spending Policy

Purpose

The South Plains College Foundation is a publicly-supported foundation whose purpose is to attract charitable contributions, prudently invest and administer Foundation funds, and financially support the objectives of the Foundation.

The purposes of this Investment and Spending Policy are to:

  1. Establish the philosophy and investment objectives for the Foundation, its Board of Directors, donors, grantees and investment managers.
  2. Serve as the basis for assessing and monitoring the performance and progress of each investment manager.


Responsibilities

The Board of Directors of the South Plains College Foundation has, in addition to its other responsibilities, the responsibility for the following:

  1. Establishing overall financial objectives and the setting of investment policy, within the scope of their authority.
  2. Obtaining high quality investment management.
  3. Monitoring performance to see if the objectives are being met and if policy and guidelines are being followed.
  4. Recommending appropriate action if objectives are not being met or if policy and guidelines are not being followed.


The investment manager(s) will be responsible for determining the investment strategy and implementing security selection within the policy and guideline limitations.

Scope

This Investment Policy statement applies only to those assets for which the investment manager(s) and the Foundation have discretionary authority.  For other assets, the investment policies are continued within the individual donor agreements.

Investment Objectives

  1. Primarily to provide long-term growth in fund assets with preservation of capital and purchasing power.
  2. Secondarily to provide sufficient current income to support activities of the Foundation.
  3. Regarding the fixed-income portion of the investment portfolio, the objective is a stable and secure return with limited interest rate risk and controlled credit risk.
  4. Regarding the equity portion of the investment portfolio, the objective is a total return which, over the long run, will perform comparable to or exceed the Standard & Poor’s 500 Market Index at a level of risk commensurate with the Index.

Investment Management Guidelines

Asset Allocation

It is expected that the investment portfolio will be well-diversified among equity securities, fixed-income securities and cash equivalents.  Consistent with the investment objectives previously defined, the following asset mix parameters have been determined in the following table:

Asset Class

Type Minimum
Weight

Target
Weight

Maximum
Weight
Representative
Index
Equities1   60% 70% 75% S&P 500
  Domestic 50%   75%  
  International 5%   15%  
  Hedged 5%   15%  
           
Fixed Income   25% 30% 40% Barclays Aggregate
  Core Bonds 20%   40%  
  Distressed Debt 0%   5%  
           
Direct Alternatives   0%   15%  

1 Equities performance will be broadly measured against the S&P 500.  Sub Strategies within Equities will also be evaluated against their relevant market benchmarks, i.e. International to MSCI World ex US, etc.

It is expected that the asset mix will be altered to either reduce market risk or optimize opportunities to capitalize on expected market movement.  The investment manager(s) will have discretion with regard to individual asset selection, although risk should be minimized through prudent diversification, both among individual assets and by asset class.

Philosophy – Equity Investments

A. The management policy to be followed should be disciplined and consistent.  It should accommodate all those events and occurrences considered reasonable and not contrary to the philosophy of the South Plains College Foundation, which is to invest funds at a prudent level of risk.
   
B.  Policies applying to Equity Investments

  1. Industry and company investments shall be based upon demonstrable analysis of prospects for above-average return over a three- to five-year period.  Emphasis should be placed on growth of earnings.  Portfolio turnover will be carefully monitored by the Treasurer.
  2. Investments shall be made in well-seasoned, quality companies with securities which have sufficient market capitalization to enjoy good marketability.  No more than 5% (at time of investment) of the net assets of the Foundation shall be invested in securities of issuers having a record less than three years’ operations.
  3. Concentration in any single industry and in any company shall not exceed 15% and 5% respectively of the market value of the Foundation at the time of investment.


C. The investment portfolio should be diversified as to equity holdings. The purpose of this diversification is to provide reasonable assurances that no single security or class of securities will have a disproportionate impact on the total portfolio.  Diversification will also be achieved by using two or more managers whose styles and investment strategies are sufficiently distinctive to justify their employment.

Philosophy – Fixed Income Investments

Policies applying to Fixed Income Securities

  1. The fixed income portfolio shall be diversified between different sectors (Governments, Agencies, Corporates) and different issues within each sector with no one issue comprising more than 10% of the aggregate fixed income portfolio.
  2. A minimum of $ 50,000,000 outstanding in each debt issue and call protection emphasized to assure stable, current income and marketability.


Philosophy – Alternatives

Direct Alternatives may include:

Private Capital Partnerships - Investment allocations may include venture capital, private equity and international private capital investments, held in the form of professionally managed pooled limited partnership investments. Such investments must be made through funds offered by professional investment managers.

Marketable Alternative Strategies - Investments may include equity-oriented or market-neutral hedge funds (i.e. Long/Short, Macro Event Driven, Convertible Arbitrage, and Fixed Income strategies), which can be both domestic and international market oriented. These components may be viewed as equity-like or fixed income-like strategies as defined by their structures and exposures.

Natural Resources – Investments may include oil, gas, and timber investments, held in the form of professionally managed pooled limited partnership investments. Such investments must be made through funds offered by professional investment managers.

Real Estate - Investments may include equity real estate, held in the form of professionally managed, income producing commercial and residential property. Such investment may be made only through professionally managed pooled real estate investment funds, as offered by leading real estate managers with proven tracks records.

Derivatives and Derivative Securities - Certain of the Fund’s managers will be permitted under the terms of their specific investment guidelines to use derivative instruments. Derivatives are contracts or securities whose market value is related to the value of another security, index, or financial instrument. Investments in derivatives include (but are not limited to) futures, forwards, options, options on futures, warrants, and interest-only and principal-only strips. No derivative positions can be established that create portfolio characteristics outside of portfolio guidelines.

Tax Considerations

The South Plains College Foundation is a 501(c)(3) corporation.  Therefore, tax-exempt securities are not appropriate.

Review Procedures

The investment manager(s) or their representative will meet with the Investment and Finance Committee at least annually for the purpose of evaluating the continuation of investment manager(s).  The evaluation of the manager(s) will focus on:

  • Adherence to investment policies and guidelines.
  • Appropriate communications and reporting to the SPC Foundation.
  • Comparison of investment results against relevant market indices.
  • Cost of investment manager services.
  • The current market outlook.

Following the annual review, the Investment and Finance Committee will make its recommendation to the Foundation Board of Directors for the continuation of investment manager(s), subject to Board approval.

Spending Policy

Based on the above-stated objectives, the current spending policy shall be expressed as a maximum of 5% of a three-year moving average of the market value of Foundation assets.  Such a policy will allow for greater predictability of spendable income for budgeting purposes and for gradual, steady growth for the support of objectives by the investable assets.  In addition, this policy will minimize the probability of invading the principal over the long term.

Since there may occasionally be situations requiring a higher percentage of spending from investable assets, in order to assure the short-term economic viability of the objectives, the Finance and Investment Committee is authorized to increase the spending rate as necessary on a temporary basis.  Such an increase should not be undertaken without clearly justifiable cause and in no case shall exceed the 6% level without explicit approval of the Board of Directors since spending above this level results in an increasing probability of invasion of the principal value of investable assets in real terms.

Spending from Underwater Endowment Funds

Spending may take place from an underwater endowment fund, subject to the rule of prudence and the guidelines set forth in the Uniform Prudent Management of Institutional Funds Act (2006), so long as such action is determined to be prudent for the uses, benefits, purposes and duration for which the endowment fund is established. In making a determination to appropriate for expenditure or accumulate so much of an endowment fund, the Finance and Investment Committee and Board of Directors shall act in good faith, with the care than an ordinarily prudent person in a like position would exercise under similar circumstances, and shall consider, if relevant, the following factors:

  1. duration and preservation of the endowment fund;
  2. the purposes of the institution and the endowment fund;
  3. general economic conditions;
  4. effect of inflation or deflation;
  5. the expected total return from income and the appreciation of investments;
  6. other resources of the institution;
  7. the investment policy of the institution.

All expenditures from endowment funds are subject to the approval of the Foundation Board of Directors.

Revised 2/10/2010 by the Finance and Investment Committee
Approved by the Board of Directors 3/30/2010

 

 


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