The Investment Office oversees the majority of the assets invested for the benefit of the University of Tennessee. These include the long-term vehicles of the Endowment and Charitable Remainder Trusts and the short-term Cash Operating Fund that supports the University’s day-to-day operations. As of 12/31/16, those combined assets stood at $2.2 billion.
The investment goal of the endowed assets is to achieve the maximum total return possible within the determined risk tolerance, and consistent with prudent investment practices. This approach centers on investing in asset classes and investment strategies where the potential for higher returns outweighs short-term volatility risk. While the investment profile of each position can vary widely depending upon the type of fund, in most instances, objectives are based upon an extended time horizon and assessed over a full market cycle. Internal staff at the University work closely with an outside consultant to craft a dynamic investment program that addresses the needs of all constituents. As of 12/31/16, the approximate market value was $871 million.
Cash Operating Fund
The Cash Operating Fund is the primary working capital vehicle for the state-wide University system. It operates according to State statute and University investment policy with regard to investable assets, maturity, and credit quality. To date, the Fund has invested in a variety of instruments including commercial paper, certificates of deposit, various U.S. Government guaranteed securities, and repurchase agreements for obligations of the United States or its agencies. In addition, the Fund can participate in the Local Government Investment Pool (LGIP) of the State of Tennessee. As of 12/31/16, assets stood at $1.3 billion.