Board explores approach to investing Consolidated Endowment Fund

Regents expect continued discussion on University investment decisions 

Following an in-depth discussion about the University’s Consolidated Endowment Fund in June, the Board of Regents reviewed this week whether or not it would pursue institutional neutrality for those investments in the future.

“The Board has deeply engaged in listening to our community and better understanding how the consolidated endowment fund functions and supports our mission,” said Board Chair Janie Mayeron. “We have learned that our University community is divided on the topic of divestment. We have also learned more about the financial challenges of divestment and the largely symbolic nature of that action. Our Board is carefully weighing these factors to determine if the University should adopt a position that it does not make investment decisions based on social and political matters beyond its control.”

During a June work session, Regents examined how the University’s centrally-held endowment is currently invested and managed, as well as the Board policies that govern those actions. The session included information about how the Consolidated Endowment Fund generates investment returns and stable financial support for mission-focused activities, as well as insights into the University’s existing investment strategies and how current policies shape these approaches.

The session also recalled historical instances when the University took a position concerning its endowment investments, occasionally including direction for targeted divestments. As part of that review, the Board also reflected on how investment management strategies have evolved. 

To produce results that meet expectations in modern market conditions, current investment strategies place more than 98% of endowment assets into indirect holdings such as mutual funds and private equity, pooling these investments with others to buy and sell assets through outside fund managers. In June, the Board discussed the financial risks that would come with any significant shift to this approach which, in total, may reduce returns and affect the ability of the invested funds to consistently deliver the mission-focused financial support that students, faculty and staff depend on.

The Board will continue to discuss the University’s position on investment decisions at a future meeting.

Public comment encouraged through Board of Regents Virtual Forum
The Board continues to welcome public comment on any topic through the Board’s Virtual Forum. The public may submit audio, video or written comments to the Virtual Forum from anywhere at any time. All comments are shared directly with Regents and included in the Board’s public docket materials. Individuals are encouraged to visit the Virtual Forum to submit their comments.

The Board also:

• Recognized outgoing U of M Duluth Interim Chancellor David McMillan.
• Approved a resolution related to expanded alcoholic beverage sales at Huntington Bank Stadium, Williams Arena/Maturi Pavillion and 3M Arena at Mariucci on the Twin Cities campus.
• Reviewed the Eastcliff Property Task Force’s recommendation to support Eastcliff through philanthropy, freeing funds for mission-focused uses.
• Received the annual report on Twin Cities intercollegiate athletics.
• Received the annual report from the University of Minnesota Alumni Association.
• Reviewed amendments to University policies related to sex discrimination required by federal law updates.

The Board of Regents is scheduled to meet next on Sept. 12-13. Visit regents.umn.edu for more information.