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Investment Guidelines |
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Medical College of
Georgia Administrative Policies and Procedures
Office of Primary Responsibility:
Controller’s Division /
Financial Accounting
No. 1.2.22
Investment Policy
1.0 Purpose
This Investment Policy Statement outlines the goals and investment objectives of
the various pools of investment assets administered by the Medical College of
Georgia. This Policy Statement also assigns responsibilities to help ensure the
accomplishment of the goals and objectives. The purpose of this Statement is to:
- Define various pools of assets
- Define the responsibilities of the various parties accountable for the
management of the assets
- Refer to detailed Investment Guidelines, which will govern the actual
administration of investment assets
This Policy Statement and Investment
Guidelines will be reviewed and revised periodically to ensure they
adequately reflect changes related to MCG and to the capital markets.
2.0 Policy
The Investment Policy Statement and Investment Guidelines are intended to
promote sound and prudent judgment in the management of investment assets,
consistent with the fiduciary responsibility of the institution.
Investment Policy will be administered by an Investment Policy Committee,
which consists of:
- MCG’s Chief Financial Officer
- Controller
- Banking/Investments Coordinator (will function as chairman of the
Committee)
- Senior Administrative Officer
- Senior Academic Officer
- Others that may be appointed by the Chief Financial Officer or the
President
The Investment Policy Committee will meet no less than once per year to:
- Review investment performance
- Review or select Investment Managers
- Make any necessary changes to this Investment Policy Statement, or the
Guidelines
3.0 Definitions
Investment Manager – An outside institutional custodian/advisor
for financial assets belonging to MCG.
Financial Assets – Cash, marketable securities, and other
investment assets, or shares and limited partnership interests of Funds
containing cash, marketable securities, and other investment assets.
Idle Cash – State appropriations, sponsored receipts,
liquidated accounts receivable, auxiliary revenues, tuition revenues and other
revenue items in MCG’s possession that will not be expended immediately, and
that have the potential to produce short-term investment income.
Endowment – Gifts of cash and securities to MCG, made in the
past, and currently invested for the perpetual benefit of MCG. These assets are
separate and distinct from similar gifts held by the Medical College of Georgia
Foundation.
Early Retirement Plan (ERP) – Instituted in year 2000 by MCG
and accepted by approximately 720 employees. MCG will make contributions to ERP
until approximately 2019, at which time ERP should be self-sustaining until the
last retiree, or spouse, has died (which theoretically could be until
approximately 2065). Achieving and maintaining self-sufficiency requires prudent
investing of MCG contributions in excess of amounts required to fund current
retiree benefits.
Guidelines – Provides the details of this Investment Policy
Statement. Guidelines could also be called “operating procedures.” Guidelines
may contain contextual and historical information about MCG, designed to help a
new employee or Committee member understand the practical application of the
Investment Policy Statement. Guidelines are likely to require revision more
frequently than the Investment Policy Statement.
4.0 Procedure
4.1 Responsibility: Medical College of Georgia
- Act as a prudent steward of its financial resources
- Form and maintain an Investment Policy Committee, that will recommend
and implement Investment Policy for MCG, to include revising the Guidelines
as necessary
- Identify types of financial assets and appropriate time horizons for
each asset type
- Develop investment goals, objectives, and performance measurement
standards, which are consistent with the needs of the institution
- Communicate the investment goals, objectives and standards to any
Investment Managers that may be used by the institution; and promptly report
to those Managers, how the various pools of financial assets should be
allocated among various asset classes
- Determine, with the advice of Investment Managers, how the various pools
of financial assets should be allocated among various asset classes
- Review and evaluate the results of any Investment Managers, in the
context of established, conventional standards of performance
- Notify Investment Managers of significant changes in cash flow, cash
flow needs, changes in investment time horizon, and any matter that bears
upon the proper investment management of MCG’s financial assets
4.2 Responsibility: Investment Policy Committee
- Accepts authority from MCG to recommend and implement Investment Policy
for the institution, to include revising the Guidelines as necessary
- Accepts primary fiduciary responsibility for MCG’s financial assets
- Selects Investment Managers based upon its perception of overall
experience, measures of investment results, quality of periodic reporting,
and costs; recognizing that these standards may be more subjective than
objective; and that past performance is no guarantee of future performance
4.3 Responsibility: Banking/Investments Coordinator
- Accepts from the Investment Policy Committee primary responsibility for
administering and implementing the Investment Policy Statement and
Guidelines
- Recommends Investment Managers and performance measurement standards to
the Investment Policy Committee
- Serves as primary contact between MCG and Investment Managers
- Monitors MCG’s cash position for the purpose of maximizing short-term
investment returns
- On a continuous basis, reports investment results to members of the
Investment Policy Committee
- Makes recommendations to the Committee regarding any issue that may
affect Investment Policy
- Remains continuously informed of the state of US financial markets
through regular contact with Investment Managers, financial periodicals, and
other media sources. Continuously reports interesting developments to
members of the Investment Policy Committee
4.4 Responsibility: Investment Managers
- Manage MCG’s financial assets in a manner consistent with the investment
objectives and constraints outlined in this Investment Policy Statement and
Guidelines
- Manage MCG’s financial assets in accordance with Federal and State laws
- Manage MCG’s financial assets in accordance with conventional prudence
and all regulations and customs associated with professional financial
fiduciaries
Date: 1
September 2005 | Rev. No:
NEW | Rev. Date: | No. 1.2.22 |