H. Investment Policy

(Note: OLPM sections on this page may be cited following the format of, for example, "BOT.IV.H.1.1". These policies may be amended at any time, do not constitute an employment contract, and are provided here only for ease of reference and without any warranty of accuracy. See OLPM Main Menu for details.)

H. Investment Policy

1. State Delegation of Authority
   1. State law (RSA 187-A:16) delegates to the Board of Trustees authority and responsibility for the management and control of all income received and due from all sources, including the authority to use the same in such manner as the Trustees may determine.
   2. State law (RSA-187-A:17) states that the Governor, the Treasurer of the University System, and 3 members of the Board of Trustees, to be selected by the Board of Trustees, shall constitute a finance committee responsible for the investment of the University System institutions' funds.
2. Trustee Delegation of Authority
   1. The Board of Trustees delegates to its Investments and Capital Planning Committee the responsibility and authority for all pooled cash and investments for (a) development of formal investment guidelines, to be reviewed and approved by the Committee at least annually; (b) selection, assessment and termination of endowment investment advisors and managers; (c) oversight of specific investments and methods of investing; (d) recommendation to the Financial Affairs Committee for the percentage and payout methodology used to determine amounts to annually distribute from endowment for operations; and (e) periodic assessment of investment strategy and results, including asset allocation, risk, return and liquidity, to ensure investment of USNH funds in accordance with the statement of investment principles below. The Investments and Capital Planning Committee delegates to the Treasurer the responsibility and authority for (a) developing and maintaining appropriate staffing, systems, procedures and controls to carry out these policies and the investment guidelines; (b) daily management of cash and investment transactions and relations with external advisors, managers, funds, banks, and other financial services firms; (c) monitoring general economic and financial conditions, determining the short-term and long-term cash needs of the University System and its institutions, and effecting timely tactical decisions to meet the best interests of the University System in the judgment of the Treasurer; (d) support and advise the Board, as appropriate, on USNH capital investments; and (e) from time to time recommending modifications to policies, guidelines, processes and advisors as appropriate.
3. Policy Scope
   1. This policy covers pooled cash and investment assets under the direct control of the USNH Board of Trustees. It does not cover non-pooled investments where affiliated boards have primary fiduciary responsibility for investment of certain funds (including UNH Foundation, and Keene Endowment Association). This policy also does not cover specifically-invested funds for which USNH is the beneficiary but that cannot be pooled together due to donor, state or other legal restrictions prohibiting commingling (including Elliott Trust Fund, bond proceeds invested by the Bond Trustee, and certain UNH Alumni Association funds).
4. Investment Principles
   1. State law (RSA 292-B:3 and 292-B:5) also known as the Uniform Prudent Management of Institutional Funds Act ("UPMIFA"), forms the conceptual framework for USNH investment policies, guidelines and procedures, for both endowment and non- endowment funds. UPMIFA states that an institution may delegate management and investment functions to its committees, officers, or employees as authorized by law of New Hampshire. Other applicable provisions of UPMIFA require that:
      1. Each person responsible for managing and investing USNH funds shall do so with loyalty to USNH, in good faith and with the care an ordinarily prudent person in a like position would exercise under similar circumstances.
      2. Factors be considered in managing and investing USNH funds, including general economic conditions; the possible effect of inflation or deflation; the role that each investment or course of action plays within the overall investment portfolio; the expected total return from income and the appreciation of investments; other resources of USNH; and USNH needs to make distributions and to preserve capital.
      3. Investment decisions about an individual asset must be made in the context of the USNH endowment or non-endowment portfolio of investments as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the portfolio and to USNH.
      4. USNH investments of its endowment and non-endowment funds shall generally be diversified.
      5. A person that has special skills or expertise, or is selected in reliance upon the person's representation that the person has special skills or expertise, has a duty to use those skills or that expertise in managing and investing USNH funds.
      6. If USNH chooses to delegate to an external agent the management and investment of endowment or non-endowment funds, USNH shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, in: selecting an agent; establishing the scope and terms of the delegation consistent with the purposes of the funds; and periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the scope and terms of the delegation.
   2. Other investment principles delineated in the formal investment guidelines to be adopted by the Investments and Capital Planning Committee include identification of risks; determination of tolerance of risk; asset allocation targets; diversification of investment strategy; diversification of investment managers; permitted investment securities; collateralization requirements; safekeeping of assets; ethics and conflicts of interest; measurement of investment performance; and periodic monitoring and reporting.