UC investment portfolios exhibit mostly positive returns
By Rupan Bharanidaran
Dec. 11, 2014 11:41 p.m.
The University of California’s investment portfolios have been yielding mostly positive returns, according to a report presented before a regents committee.
The UC Board of Regents’ Committee on Investments met via teleconference Wednesday to review the financial performance of the UC’s $91 billion in investment portfolios through the end of September.
Jagdeep Singh Bachher, chief investment officer for the University, said there have been increases in most of the UC’s portfolios because of recent gains in U.S. equity markets. For example, the UC’s pension fund has increased from $47 billion to $52.1 billion over the past year.
However, Bachher said the UC’s investment portfolios could face potential losses in the future and that active and efficient management will be critical moving forward. Bachher said his main concerns are the current drop in gas prices, which have adversely affected energy stocks, and the slowing down of emerging markets such as China. He also noted that interest rates, which are currently low, are expected to increase sometime in 2015 with the end of the Federal Reserve’s easy-money policies.
Based on data from June 30, the individual campus funds’ investments have been doing well, with the UCLA Fund’s investments yielding a 11 percent return over five years, said Terry Dennison, the board’s general investment consultant. Dennison added that he had no issues or concerns to report.
But some officials said they disagreed with the assessment.
Regent Paul Wachter, chair of the Committee on Investments, said that based on the data presented before the committee, he does not think investments of campus funds, particularly those of the smaller funds, have been doing well. Wachter urged the Office of the Chief Investment Officer to work with managers of the campus funds to examine ways to increase their returns.
Wachter also criticized those who manage the campus funds for providing complete data through June 30 instead of Sept. 30, saying he would like to see more current assessments.
At the close of the public session of the meeting, Bachher said his office is looking into taking climate change and sustainability into consideration when managing investments.
He said he plans to present the findings, along with an update on a business plan for UC Ventures, a independent fund pursuing investment in UC research-fueled enterprises, at the committee’s next meeting in February.
Compiled by Rupan Bharanidaran, Bruin contributor.
