1. University of Utah Endowment Presentation to Development Office March 1, 2016

2. Investment Organization Sr. Chief Administrative Officer & CFO John Nixon VP for Administrative Services Arnold B. Combe Associate VP & CIO Jonathan L. Shear Dir, Banking & Operational Investing Mel F. Smith Dir, Endowment Investments Mark L. Waite Investment Operations Analyst Michelle L. Allison Student Intern 2 Investment Advisory Committee 6 Members

3. Endowment A gift that is invested and not spent directly. Typically, only a portion of the interest is used to support a program. As such, endowment funds provide reliable income into perpetuity. UofU Endowment Total Endowment: $1.023B (includes New Quasi of $200M) Endowment Pool: $720M in assets as of October 31, 2015 Target Return: 8% annually Spending Rate: 4% of trailing 12 Qtr. average MV Endowment Investment Policy Establishes policies and procedures related to the governance and reporting of all endowment funds Establishes risk and return objectives and asset allocation guidelines for the management of the Endowment Pool 3

4. University of Utah Endowment Sep 30, 2015 True Endowment$519M Term Endowment$0.3M Existing Quasi$200M Endowment Pool$720M New Quasi $180M Funds Held Outside$124M TOTAL$1,023M 4

5. Donor Gift Options Endowment Pool— commingled pool of endowed gifts to the University Social Choice Pool – emphasis on social and environmental issues Legacy Gift Options: Remainder Trusts, Life Annuities, Bequests. 5

6. Endowment Pool Accounting Procedures Endowment Pool functions similar to a mutual fund, (but on quarterly rather than daily valuation basis.) New contributions $ added to the Pool quarterly Quarterly calculations of unit values (12 Qtr. running average market value) Quarterly distributions to meet spending needs If the Pool goes under water (due to large MV decline), the spending rate may be reduced or suspended. 6

7. Endowment Gifts & Spending 7

8. Where Do Funds Go 8

9. Ranking of Endowments 2015 NACUBO Survey – 828 participating colleges/universities in North America Ten Largest Endowments (Billions) 1.Harvard$36 2.Yale$26 3.U of Texas$24 4.Princeton $23 5.Stanford$22 6.MIT$13 7.Texas A&M$10 8.Northwestern$10 9.U of Pennsylvania$10 10.U of Michigan$10 #93University of Utah$1.0 9

10. Endowment Size -- PAC 12 2015 NACUBO Survey (Bil)Nat’l Ranking 1 Stanford$22.2 5 2 Univ. California$8.0 13 3 USC$4.7 21 4 Washington$3.0 30 5 UCLA$1.9 46 6 Colorado$1.1 89 7 Utah$1.0 93 8 Washington State$0.9 105 9 Arizona$0.8 127 10 Oregon$0.7 137 11 Arizona State$0.6 150 12 Oregon State$0.5 175 10

11. Growth of Endowment Pool * Excludes New Quasi of $200M. 11

12. Endowment Pool Peer Comparison -- Returns Average Annual Returns Preliminary NACUBO 2015 Endowment Size1-Year3-Year5-Year10-Year %% Over $1B4.310.810.47.2 $501M - $1B2.810.29.96.7 $101M - $500M29.79.56.2 University of Utah2.67.78.15.4 12

13. Endowment Pool Peer Comparison -- Asset Allocation Size of Endowment Domestic Equities Fixed Income Int’l Equities Alternative Strategies Cash %% % Over $1B13%7%19%57%4% $501M to $1B21%9%20%44%6% $101M - $500M27%13%21%34%5% Univ Utah ($715M)28%29%17%26%0% 2015 Preliminary NACUBO Survey 13

14. Change in Investment Approach Goals: Be competitive with PAC-12 returns on fiscal year basis Portfolio strategy representative of $1B size endowment as shown in NACUBO survey Changes in 2015: Approved new investment policy Hired new consultant, Fund Evaluation Group (FEG) Implementing new strategy using FEG recommendations (see next slide.) 14

15. Change in Investment Policy ASSET ALLOCATION 12-Month3-Year CurrentTarget %% Public Equities383625 Hedged Equity665 Private Eq & Venture Cap7710 Core Fixed Income301411 Credit Sensitive369 Real Estate227 Nat'l Resources2913 Diversifying Strategies1220 TOTAL100 15

16. Change in Investment Policy ASSET ALLOCATION 16

17. Conclusions Goals for University’s endowment next 10 years: 1)Double size of endowment: $1B to $2B 2)Be # 5 in PAC-12, (Larger than UCLA) How?: 1)Improve investment returns 2)Dedicated goals for endowment fundraising? 3)Designate additional quasi 17