UVA Imputed Interest Program

1
Investing Alternatives
Endowment vs. Imputed Interest March 3, 2004
2
UVA Imputed Interest Program

• When should I invest?
• The Imputed Interest program is for the short
  term investment of idle departmental funds,
  usually with an investment term of between 6
  months 3 years.

3
Restrictions
What can I invest?

• Local Funds
• Gift Endowment Income

What cant I invest?

• State Funds (sales service, auxiliary etc.)
• Grant Related Funds

4
Interest Rate History
5
How do I invest in the program?
Process an Oracle Journal Entry UVA Transfer
Category
6
How do I divest from the program?
Process an Oracle Journal Entry UVA Transfer
Category
7
How is interest paid?

• Each quarter, Investment Tax Services will
  calculate and post imputed interest earned to
  each project using the 4836 Imputed Interest
  Income object code. This income will be
  automatically reinvested into the program.

8
UVA Pooled Endowment Fund

• What are my investment options when would I
  choose them?
• True Endowment
• Gift funds that are designated by the donor for
  endowment purposes.
• Quasi Endowment
• Discretionary departmental decision to invest
  excess gift or endowment income.

9
When should I invest in a Quasi Endowment?

• If you have excess gift or endowment income that
  is not needed for operational purposes for a
  period greater than three years.

10
How do I create a Quasi?

• Complete a Request for Establishment of a
  University Quasi Endowment Project. The
  department head/chair/dean attaches a memo to
  Leonard Sandridge requesting approval of the
  quasi endowment. This memo should outline the
  following items
• Source amount of funds
• Why funds are not needed at this time
• Investment term
• Withdrawal needs
• Use of income generated

11
How do I create a Quasi? (contd)

• The department sends the Request for
  Establishment of a University Quasi Endowment
  Project to Investment along with the approval
  memo to Investment Tax Services.
• ITS obtains approval from Leonard Sandridge.
• ITS creates the new Quasi Endowment project
  award.
• The department prepares an Oracle Journal Entry
  UVA Transfer

12
How do I invest in a Quasi?
Process an Oracle Journal Entry UVA Transfer
Category
13
Can I divest from a Quasi?

• Upon approval by Leonard Sandridge, funds can be
  liquidated from the Pooled Endowment Fund on the
  first of each month.

14
Why should I invest in the Pooled Endowment Fund?
Performance

• Jan-04 1.3
• 1 year 17.7
• 5 year 15.4
• 10 year 13.4

15
Pooled Endowment Asset Allocation
16
Questions