Governance and Investment Philosophy

Operating from its downtown location on North Michigan Avenue, the Office of Investments manages the University of Chicago's endowment and other portfolio assets. The Vice President and Chief Investment Officer reports jointly to the President of the University and to the Investment Committee of the Board of Trustees. The eleven members comprising the Investment Committee set strategic policy and provide governing directives to the Office of Investments. Committee members come to the University of Chicago with world-class investment credentials.

Although legally under the aegis of the University umbrella, the Office of Investments in many ways behaves as a separate management company. Bureaucratic constraints are minimal and policies are established to ensure proper control without encumbering decision-making.

Responsibilities for the eighteen-member staff are delineated clearly; however, everyone is expected to participate actively in areas that impact the whole portfolio. Evaluation of the professional staff is based both on total portfolio performance and individual contribution to the success of that performance. We believe that success can be achieved by practicing six rules:

1. Study and reflect upon the mercurial nature of the capital markets;
2. Provide leadership in the investment industry;
3. Continually evaluate the underpinnings of existing portfolio themes, and critically assess the potential value of new opportunities;
4. Undertake thorough due diligence in every investment under consideration;
5. Implement decisions decisively and quickly; and
6. Closely monitor past decisions and understand the reasons for results achieved.

We believe that the business of portfolio management is a business. Resources are deployed in those areas where return on management is highest. Thus, effort is minimized in areas where return is low. For example, U.S. Equity exposure largely is indexed and U.S. Fixed Income is invested in Treasuries and Government Agencies.

The University of Chicago and the Office of Investments possess significant competitive advantages which can be exploited:

1. As one of the premier research institutions in technology, many Venture Capital general partners highly value our capital participation;
2. Our legacy to the fields of Finance and Economics provides an excellent platform to strike deals with the most intellectually demanding players undertaking Absolute Return and other complex portfolio strategies; and
3. Our clean governance structure and clear mandate allows us to provide liquidity when priced attractively in all asset classes, including Real Assets and High Yield securities.

In short, our breadth and depth of investment experience allow us to partner with the very best managers in their respective market niches.