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Fort Lewis College Board of Trustees - Investment Policy Statement

Approved April 4, 2014

Pursuant to Section 23-52-103.5(1), Colorado Revised Statutes, if the Board of Trustees votes to invest Fort Lewis College’s assets, the Board shall develop and annually review a written Investment Policy for Fort Lewis College. Approval of this Investment Policy by the Board serves as an acknowledgement of the Board’s fiduciary responsibility with respect to oversight of the Investment Policy of Fort Lewis College.

Pursuant to section 23-52-103(4), Colorado Revised Statutes, if the Board of Trustees votes to invest Fort Lewis College’s assets, the Board of Trustees shall establish an Investment Advisory Committee (IAC), which shall consist, at a minimum, of the following five (5) members: the Fort Lewis College Treasurer, one (1) members of the Board of Trustees, and three (3) representatives from the financial community. At least one member shall be a Certified Financial Analyst. The Vice President for Finance and Administration, Director of Budgets and Controller will serve as staff to the IAC. The Investment Committee shall be appointed under separate action by the Board of Trustees.

The IAC is responsible for making recommendations to the Board regarding investments, and developing investment guidelines in support of the “prudent investor” standard, providing liquidity, safety, and yield. In formulating investment guidelines, the IAC shall take into account institutional cash flow analysis, diversification of investments, appropriate time horizons, and credit quality of investments to establish return benchmarks at acceptable levels of risk. Liquidity of assets invested shall at all times remain at a level sufficient to pay for all budgeted, outstanding operational obligations and expenses occurring within any fiscal year.

The Deputy Treasurer (Vice President of Finance and Administration), upon the advice of the IAC is specifically authorized to engage a financial advisor to assist in the establishment of investment guidelines and risk parameters. The Board authorizes the Deputy Treasurer, on behalf of the Board of Trustees and in consultation with the IAC, to engage professional investment managers through an open and competitive process and to invest assets with and through selected investment managers to achieve optimum returns within established investment guidelines. The IAC, in consultation with the investment managers, shall establish performance benchmarks for each investment class and provide a composite return to serve as a benchmark against the annual returns of the State Treasurer. Returns are to be measured on both a gross-of-fee and net-of-fee basis.

Investments, unless externally restrained, are allowed in one or more “consolidated funds” in which the participation trusts or accounts have undivided interests. The Board also authorizes the Deputy Treasurer, on behalf of the Board of Trustees, to hold certificates of stock in the name of a nominee of its selection in conformance with section 23-52-103.4(1)(a) and (b), Colorado Revised Statutes.

The Deputy Treasurer, in consultation with the IAC, will develop a formula for maintaining undistributed investment returns in amounts which are considered to be reasonably adequate to dampen the effects of natural market cycles on the market value of invested assets and to protect the annual earnings distribution budget. This formula will serve as the basis for forecasting the amount of investment income to be relied upon for annual operating purposes.

The Deputy Treasurer shall report on the allocation and performance of investments to the Board of Trustees through quarterly reports and submit annual financial statements to the Board of Trustees, the State Treasurer, the State Auditor, and the Joint Budget Committee of the General Assembly at each regular session regarding the investments made and any earnings or losses on both a gross-of-fee and a net-of-fee basis.

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