Financial Services

Investment Policy

Policy No.
UP09/13
Function
Financial Management
Authoring Organisational Unit
Treasury and Investments
Date Approved
01/06/2001 Revised 01/03/2015
Next Review Date
01/08/2017
Approving Body
Senate

The University of Western Australia

University Policy on: Investments

Purpose of the policy and summary of issues it addresses:

This Investment Policy Statement (IPS) governs the management of the University's Investment Portfolio and sets out investment guidelines such as investment restrictions and performance objectives, performance benchmarks and the strategic benchmarks for each investment pool.

Definitions:

General

Average Monthly Balance (AMB)

Measurement of an individual fund's investment balance determined by the average of the opening monthly balance recorded in the financial management information system each month for the months from 1 January to 1 December for the years in the period.

ADI

Authorised Deposit-taking Institutions (ADIs) are corporations authorised under the Banking Act 1959 and under the regulation of the Australian Prudential Regulation Authority (APRA).

Asset Allocation

The Investment Portfolio's exposure to various asset classes.

Asset Allocation Benchmark

The Investment Portfolio's target exposure to asset classes as defined by the strategic asset allocation in the Investment Policy Statement.

Composite Strategic Benchmark

Benchmark based on the performance as measured by the asset class market indices for the Investment Pool Strategic Asset Allocation under this Policy as outlined in Attachment G .

Contributor

An internal or external "investor" or stakeholder in the University's Investment Portfolio.

Contributors may be grouped into different categories based on criteria such as source of funds, purpose of funds and restrictions on spending such as specific conditions (if any).

Consumer Price Index (CPI)

A measure of price inflation issued by the Australian Bureau of Statistics.

The CPI measure used is All Groups (weighted average eight capital cities).

Defensive Asset

Asset classes that are generally considered to provide lower risk at a lower rate of return, and reduce the risk of loss.

Distribution Rate

The distribution of net investment earnings to the contributors as a percentage of the average monthly balance of contributors.

The net investment income available for distribution is the actual investment earning net of external and internal fees adjusted for transfers to/from reserves and any other adjustments.

Earnings Rate

The actual investment earnings generated by an Investment Pool net of external and internal fees and charges as a percentage of average monthly balance of contributors.

Fund

A restricted or specific purpose contributor recognised as an individual investor into the Investment Portfolio.

Growth Asset

Asset classes that are generally considered to provide a higher rate of return at a higher risk, to enable the portfolio to achieve capital growth over the medium to long term.

Implemented Consultant

Professional Implemented Consultant appointed by the University for the purpose of investing and implementing University Funds under this Policy.

Investment Consultant

Professional investment consultant appointed by the University.

Investment Managers

Professional Fund Managers or Implemented consultant appointed by the University for the purpose of investing University Funds under this Policy.

Investment Policy Statement (IPS)

The document outlining the Senate approved requirements for management of the Investment Portfolio.

Investment Pool

A component of the University's Investment Portfolio which separates the specific investment strategies and policies for a portion of the Portfolio.

Investment Portfolio

The University's total investment assets including managed and direct investments.

Investment Year

Equivalent to the University's financial year or calendar year, being 1 January to 31 December.

Market and Portfolio Risk

Risk associated with the investment of funds and includes wider systematic and non-systematic risks including interest rate risk, country risk, transaction risk, etc.

Net Earnings Rate

The actual investment earnings generated by an Investment Pool net of external and internal fees and charges and any other adjustments as a percentage of average monthly balance of contributors.

Performance Benchmark

The Investment Portfolio's target performance rate of return.

Spending Policy

The policy governing the flow of investment income from the Investment Pools to the contributors including amounts available for spending and preservation.

University User Pay Policy

The University User Pay Policy gives rise to the users of a specific service being charged a proxy fee to recover the costs incurred by the University in the provision of the service.

Asset Classes

Australian Equity

Ordinary shares traded on the Australian stock exchange.

Global Equities

Ordinary shares traded on global stock exchanges, which can be strategically divided into the following categories:

a. Developed Market Equity: the top 85% of developed market global equities on a market capitalisation basis

b. Global Small Cap Equity: the bottom 15% of developed market global equities on a market capitalisation basis

c. Emerging Market Equity: equity issued by corporations within developing economies

Alternatives

Investments that do not fit into the mainstream areas of listed equities, bonds and property

a. Unlisted Infrastructure: The physical assets and their associated services that are essential for the functioning of modern society

b. Unlisted Property: Direct investment in unlisted property assets

c. Private Equity: Equity and associated debt of non-listed companies

d. Defensive Alternatives: Alternatives that are expected to be less volatile than, and have lower correlations with, traditional asset classes

Australian Fixed Income

Fixed income securities issued in Australia by Australian governments and corporates with investment grade credit ratings

Global Fixed Income

Fixed income securities issued in developed countries by Global governments and corporates with investment grade credit ratings

Absolute Return Fixed Income

Fixed income strategies targeting a positive return in absolute terms in all market conditions

Growth Fixed Income

Fixed income securities that are associated with potentially higher risk and returns than developed sovereign bonds and investment grade credit

  1. Emerging Market Debt: Debt issued by governments and corporations within developing economies. Debt may be issued in the currency of the issuing country or, more commonly, in the currency of a major industrialised economy.
  2. High Yield: Corporate bonds that have a credit rating that is lower than BBB-

Inflation Linked Bonds

Bonds, primarily issued by governments, where the principal and interest are adjusted to keep pace with actual inflation

Policy statement:

1. Definitions

1.1 The terms used in this Policy are defined above.

2. Application

2.1 This Investment Policy Statement covers the operation of the University's Investment Portfolio.

2.2 This Investment Policy Statement excludes investments of a strategic and intellectual property nature made by the University outside the operation of the Investment Portfolio.

3. Legislation

3.1 The University of Western Australia Act 1911 requires the investment of University monies to be managed as trust funds.

3.2 The investment of University trust assets must comply with Part III of the Trustees Act 1962. In particular, the investments must:

3.2.1 Meet the "prudent person" rule; and

3.2.2 Be reviewed at least once each year.

4. Investment Management

4.1 Senate is responsible for approving the University's Investment Policy.

4.2 The Strategic Resources Committee is responsible for managing the investment policies and strategies of the University's investments within the framework of strategy approved by the Senate.

4.3 The implementation of Investment Policy is delegated to the Vice Chancellor, acting on the advice from resources with appropriate expertise.

4.4 Unless otherwise provided by this Policy, the Chief Financial Officer shall have specific delegated authority in relation to the day to day management of the Investment Portfolio, as approved by the Vice Chancellor.

4.5 Investment Managers shall be appointed from time to time to manage the University's investments. All such appointments and terminations shall be reported to the Strategic Resources Committee under clause 16.7.

5. Investment Portfolio - Purpose

5.1 The purpose of the University's Investment Portfolio is to maximise the investment return on available capital for an agreed level of risk in order to:

5.1.1 Support the purpose and mission of the University over the long term;

5.1.2 Provide intergenerational equity by preserving real value of capital for future generations;

5.1.3 Provide capital growth to support University growth projections;

5.1.4 Provide funds to support the University's short term spending commitments; and

5.1.5 Provide a reasonable level of funding stability from year to year.

6. Investment Policy - General

6.1 The University shall manage the Investment Portfolio, in accordance with the strategic and dynamic asset allocation framework as outlined in this Policy.

6.2 Where the services of Investment Managers are used, the Managers shall have full responsibility for the investment of the assets, within agreed mandates.

6.3 Where the services of an Implemented Consultant are used that consultant will be responsible for the management of the University's investment Portfolio and implementation in accordance with the IPS.

6.4 The Investment Managers are required to comply with prudent standards of judgement, as would be compatible with the skill and expertise of a professional in the business of portfolio management.

6.5 The University funds are to be invested by way of:

6.5.1 Individual investment funds with agreed mandates;

6.5.2 Managed funds; or

6.5.3 Direct investments where appropriate in shares, property, other listed and unlisted securities and cash and short term money market investments.

6.6 Investment of funds is subject to the specific conditions and requirements of the individual contributor fund.

7. Investment Pools

7.1 The University's investment Portfolio is generally managed through a pooled investment approach.

7.2 The Investment Pools are to be managed to provide investment strategy options.

7.3 In determining the investment of University contributor funds into an Investment Pool, the following shall be considered:

7.3.1 The nature and purpose of the funds;

7.3.2 The University guidelines for the investment of funds into the Investment Pools, as determined by the Chief Financial Officer;

7.3.3 The projected net cash flow in relation to the specific funds;

7.3.4 The level of sensitivity to risk/return volatility;

7.3.5 The investment time horizon; and

7.3.6 Any specific conditions and requirements associated with the use and investment of the funds.

7.4 The University's Investment Portfolio provides the Investment Pool structure, as outlined in Attachment A .

7.5 Cross Pool investment exposures may be used to manage daily variations between the contributor funds invested into a Pool and the value of the investment assets, and to support the Investment Pool liquidity requirements.

8. Cash Pool

8.1 The Pool seeks to meet the short term liquidity requirements of the University for rolling twelve month periods.

8.2 Pool Structure:

The Pool consists of a core cash component to meet the University's operational cash flow and overall liquidity requirements. The level of additional investment will vary based on the value of funds invested into the Pool.

8.3 Performance Objective:

The investment objective is to achieve a return (net of tax and fees) at least equal to the official Reserve Bank of Australia (RBA) Cash Rate over rolling 12 month periods.

8.4 Risk Objective:

The risk objective is to provide a probability of negative returns of 0%.

8.5 Time Horizon:

The time horizon is an investment period of 0-1 years, with an average duration of investments between 45 and 90 days.

No individual investment shall have a duration greater than one year, unless otherwise approved by the Chief Financial Officer.

8.6 Performance Benchmark:

The performance benchmark is the Bloomberg Bank Bill Index.

8.7 Spending Policy:

Contributors will receive an income distribution based on:

8.7.1 The annual actual net earnings rate; or

8.7.2 An agreed investment rate on the approval of the Chief Financial Officer; and

8.7.3 Any differential between the actual net earnings rate and approved investment rate is to be distributed to the University Budget.

8.8 Management Fees:

The Pool shall incur any direct external costs and an internal management charge in accordance with the University's user pays principles, as approved by the Chief Financial Officer.

8.9 Asset Allocation:

The Pool can invest in any of the following type of cash investments:

8.9.1 Bank Accounts;

8.9.2 Term Deposits;

8.9.3 Short Term Money Markets accounts;

8.9.4 Negotiable Certificates of Deposit;

8.9.5 Bank Accepted and Bank Endorsed Bills;

8.9.6 Promissory Notes, Floating Rate Notes and Commercial Paper; and

8.9.7 Cash funds managed by external Investment Managers.

8.10 Diversification:

Investments shall be made to ensure a reasonable level of institutional diversification relative to the total funds in the Pool and subject to institutional limits.

Approval of the acquisition of investment assets (excluding managed funds) is subject to maximum investment limits for groupings based on institution, credit ratings and asset type, as outlined in Attachment B: For the purpose of this, investments in managed funds are to be based on each fund's average effective rating.

8.11 The Vice Chancellor and/or the Chief Operating Officer, on the recommendation of the Chief Financial Officer, can approve temporary increases to ADI institutional limits to facilitate short term or overweight cash holdings. Each temporary increase can be approved for a period up to 12 months.

8.12 In the event of an ADI downgrade, the Vice Chancellor and/or Chief Operating Officer, on the recommendation of the Chief Financial Officer, can approve a short term investment plan.

8.13 Investments of the Cash Pool may be subject to State or Federal guarantees at the discretion of the Vice Chancellor and/or Chief Operating Officer, or as determined by Senate from time to time.

9. Short Term Pool

9.1 The Pool seeks to provide low to moderate real returns with a strong focus on capital preservation.

9.2 Pool Structure:

The Pool represents the working capital of the University and is considered to be of a short term nature. Investments shall be managed to provide liquidity and may consist of Investment Managers, direct investments and investments into the Cash Pool.

9.3 Performance Objective:

The investment objective is to achieve a total return (net of tax and fees) that exceeds the increase in the Consumer Price Index plus 2.0% over rolling three year periods.

9.4 Risk Objective:

The risk objective is to provide a probability of negative returns of less than 4% (1 in 25 years).

9.5 Time Horizon:

The time horizon is an investment period of 1-3 years.

9.6 Performance Benchmark:

The performance benchmark for the Pool is the composite strategic benchmark over rolling three year periods.

9.7 Spending Policy:

Contributors shall receive an income distribution based on:

9.7.1 The rolling three year average actual net earnings rate; or

9.7.2 An agreed investment rate, subject to the Pool's Reserving Policy, on the approval of the Chief Financial Officer; and

9.7.3 Any differential between the actual net earnings rate and approved investment rate is to be distributed to the University Budget.

9.8 Reserving Policy:

Investment Fluctuation Reserves shall be maintained to provide smoothing of the Pool distribution rate;

9.8.1 The level of the reserves shall be determined based on the Pool's performance and contributor outlook (1-3 years) and shall be benchmarked at 2% of total contributors;

9.8.2 Any excess reserves may be distributed by way of adjusted future distribution rates or additional special distributions; and

9.8.3 Contributor funds shall be grouped for the purpose of maintaining reserves. The Vice Chancellor and/or the Chief Operating Officer, may exclude a fund or contributor group from the reserving policy, on the recommendation of the Chief Financial Officer.

9.9 Management Fees:

The Pool shall incur any direct external costs and an internal management charge in accordance with the University's user pays principles, as approved by the Chief Financial Officer.

9.10 Strategic Asset Allocation:

The table as outlined at Attachment C, sets out the benchmark portfolio within which the Pool (including cross pool exposure) is expected to operate and against which performance will be measured:

9.11 The Pool's asset allocation, including the impact of derivatives on an effective exposure basis, is required to fall within the minimum and maximum ranges.

9.12 From time to time, the benchmark and ranges may need minor adjustments in order to accommodate changes made to the underlying portfolios managed by the Investment Managers. The Strategic Resources Committee can approve minor modifications as required, as long as the exposure to defensive assets remains at 100%.

9.13 The Pool's asset allocation may be varied in accordance with the Dynamic Asset Allocation framework (as per clause 12), subject to the Pool maintaining investments within the Pool asset class benchmarks.

9.14 The Pool's exposure to cash assets may be obtained through investment in the Cash Pool. The investment may be varied subject to the Pool maintaining investments within Pool asset class benchmarks, or on approval of the Vice Chancellor and/or the Chief Operating Officer to provide an increased defensive position.

10. Medium Term Pool

10.1 The Pool seeks to provide moderate real returns over a medium time horizon. The Pool aims to achieve a reasonable balance between providing sufficient probability of achieving real returns and preserving capital.

10.2 Pool Structure:

The Pool generally represents funds of a non-permanent (reducing capital) nature and may include a portion of the University's working capital that has a medium term time horizon and a moderate level of risk tolerance.

10.3 Performance Objective:

The investment objective is to achieve a total return (net of tax and fees) that exceeds the increase in the Consumer Price Index plus 3.5% over rolling five year periods.

10.4 Risk Objective:

The risk objective is to provide a probability of negative returns of less than 12% (1 in 8 years).

10.5 Time Horizon:

The time horizon is an investment period of 4-7 years.

10.6 Performance Benchmark:

The performance benchmark for the Pool is to exceed (after fees) the return on the composite strategic benchmark over rolling five year periods.

10.7 Spending Policy:

Contributors shall receive an income distribution based on:

10.7.1 The rolling three year average actual net earnings rate; or

10.7.2 An agreed investment rate subject to Pool's Reserving Policy, on the approval of the Chief Financial Officer; and

10.7.3 Any differential between the actual net earnings rate and approved investment rate is to be distributed to the University Budget.

10.8 Reserving Policy:

Investment Fluctuation Reserves shall be maintained to provide smoothing of the Pool distribution rate;

10.8.1 The level of the reserves shall be determined based on the Pool's performance and contributor outlook and shall be benchmarked at 7.5% of total contributors;

10.8.2 The Pool's distribution rate may be amended to maintain the level of reserves;

10.8.3 Any excess reserves may be distributed by way of adjusted future distribution rates or additional special distributions; and

10.8.4 Contributor funds shall be grouped for the purpose of maintaining reserves. The Vice Chancellor and/or the Chief Operating Officer, may exclude a fund or contributor group from the reserving policy, on the recommendation of the Chief Financial Officer.

10.9 Management Fees:

The Pool shall incur any direct external costs and an internal management charge in accordance with the University's user pays principles, as approved by the Chief Financial Officer.

10.10 Strategic Asset Allocation:

The table as outlined at Attachment D, sets out the benchmark portfolio within which the Pool (including cross pool exposure) is expected to operate and against which performance will be measured:

10.11 The Pool's asset allocation, including the impact of derivatives on an effective exposure basis, is required to fall within the minimum and maximum ranges.

10.12 From time to time, the benchmark and ranges may need minor adjustments in order to accommodate changes made to the underlying portfolios managed by the Investment Managers. The Strategic Resources Committee can approve minor modifications as required, as long as the maximum exposure to growth assets remains unchanged.

10.13 The Pool's asset allocation may be varied in accordance with the Dynamic Asset Allocation framework (as per clause 12), subject to the Pool maintaining investments within the Pool asset class benchmarks.

10.14 The Pool's exposure to cash assets may be obtained through investment in the Cash Pool. The investment may be varied subject to the Pool maintaining investments within Pool asset class benchmarks, or on approval of the Vice Chancellor and/or the Chief Operating Officer to provide an increased defensive position.

11. Long Term Pool

11.1 The Pool seeks to provide strong real returns over long time periods. The Pool has a high risk tolerance and aims to limit underperforming inflation over the long term.

11.2 Pool Structure:

The Pool contains funds of a permanent or long term nature. Accordingly, the majority of the assets will be invested in the growth sectors with the remaining assets invested in defensive assets for diversification.

11.3 Performance Objective:

The investment objective is to achieve a total return (net of tax and fees) that exceeds the increase in the Consumer Price Index plus 5.0% p.a. over rolling ten year periods.

11.4 Risk Objective:

The risk objective is to provide a probability of negative returns of less than 20% (1 in 5 years).

11.5 Time Horizon:

The time horizon is an investment period of 8 years or more.

11.6 Performance Benchmark:

The performance benchmark for the Pool is to exceed (after fees) the return on the composite strategic benchmark over rolling ten year periods.

11.7 Spending Policy:

11.7.1 Contributors shall receive an income distribution to contributor's capital accounts based on the annual actual net earnings rate; and unless otherwise specified in the Fund conditions or by other provision;

11.7.2 An amount is distributed from the contributor's capital accounts for annual spending based on 5% of the individual contributors' average capital account balances over proceeding 36 months balance; or

11.7.3 An amount for spending in accordance with the contributor's specific conditions or provision; and

11.7.4 Where specific contributor conditions are silent on the capitalisation or carry forward of unspent monies distributed under the spending policy, monies may be recapitalised if remain unspent after a reasonable period of time.

11.8 Management Fees:

The Pool shall incur any direct external costs and an internal management charge in accordance with the University's user pays principles, as approved by the Chief Financial Officer.

11.9 Strategic Asset Allocation:

The table as outlined at Attachment E, sets out the benchmark portfolio within which the Pool (including cross pool exposure) is expected to operate and against which performance will be measured:

11.10 The Pool's asset allocation, including the impact of derivatives on an effective exposure basis, is required to fall within the minimum and maximum ranges.

11.11 From time to time, the benchmark and ranges may need minor adjustments in order to accommodate changes made to the underlying portfolios managed by the Investment Managers. The Strategic Resources Committee can approve minor modifications as required, as long as the maximum exposure to growth assets remains unchanged.

11.12 The Pool's asset allocation may be varied in accordance with the Dynamic Asset Allocation framework (as per clause 12), subject to the Pool maintaining investments within the Pool asset class benchmarks.

11.13 The Pool's exposure to cash assets may be obtained through investment in the Cash Pool. The investment may be varied subject to the Pool maintaining investments within Pool asset class benchmarks, or on approval of the Vice Chancellor and/or the Chief Operating Officer to provide an increased defensive position.

12. Dynamic Asset Allocation (DAA)

12.1 The University may use Dynamic Asset Allocation in response to market conditions, with the aim to add incremental returns and reduce investment volatility of the University's Investment Portfolio. Such adjustments or tilts to asset allocations shall be within the minimum and maximum Strategic Asset Allocation limits for each Pool as set out in this Policy.

12.2 The University may implement Dynamic Asset Allocation strategies either through the appointed Investment Managers or a specialised DAA Manager on the recommendations of the external investment consultants.

12.3 The Dynamic Asset Allocation strategies can only be carried out subject to an agreed mandate and procedures which set out appropriate restrictions, benchmarks, risk management and governance requirements.

13. Direct Investments

13.1 The University may hold direct investments for a specific contributor, which are governed in accordance with the contributor's specific conditions or other provision,

13.2 The University may accept gifts of non-cash financial assets under a University Policy on Charitable Gift Acceptance (UP13/13), or as otherwise approved by the Vice Chancellor and/or Chief Operating Officer; and

13.2.1 The University retains the right to convert the gift to cash at its own discretion; and

13.2.2 Invest any monies received in an Investment Pool, in accordance with the investment of contributor funds under clause 7.3 of the Policy.

13.3 Unless otherwise provided by this Policy or another University Policy, a case by case review shall be carried out and specific approval of the Chief Financial Officer shall be obtained prior to investing in any new direct investments.

13.4 The direct investments shall incur any direct external costs, and, at the discretion of the Chief Financial Officer, may incur an internal management charge in accordance with the University's user pay principles as per the charge that applies to pooled investments.

14. Risk Management

14.1 The Investment Portfolio shall be managed to maximise the investment return for an agreed level of risk for the purpose as stated in Section 5 of this Policy.

14.2 The Investment Portfolio shall be managed with a view to ensuring sufficient liquidity to meet projected cash flow requirements.

14.3 Risk shall be minimised by appropriate diversification of investments gained through asset allocation, investment styles, manager and portfolio construction.

14.4 Movement of investment funds is to be undertaken in tranches, where possible, to reduce market risk.

14.5 Investment Managers are permitted to use derivative instruments such as futures and options to assist with the effective management of the investments. Derivatives may not be used to gear the Portfolio. The use of derivatives is to be in accordance with the previously agreed Manager's Risk Management Policy.

14.6 An Investment Manager is generally restricted to:

14.6.1 Investing no more than 10% of their portfolio in any one security or asset, unless prior approval has been obtained from University;

14.6.2 Investing no more than 5% of the issued capital of any one entity without notifying the University, so that the appropriateness of the investment can be considered and action taken where required; and

14.6.3 Hedging investments that expose the University to foreign currency risk in accordance with the hedging position of each individual asset class, unless prior approval has been obtained from the University.

14.7 Management is responsible for implementing the University's investment risk management strategy as per the identified specific risks and risk management strategies outlined in Attachment F.

15. Environment, Social and Corporate Governance (ESG)

15.1 The University considers material ESG factors in its investment decision-making including the selection of new Investment Managers.

15.2 Unless otherwise specifically approved by the Vice Chancellor and/or Chief Operating Officer, the management of the Investment Portfolio will comply with:

15.2.1 The University's Policy on Funding from the Tobacco Industry (UP 07/01) through monitoring and restricting any material investment in companies that are engaged directly in the production, manufacture, distribution, promotion or marketing of tobacco or tobacco products as its primary business; and

15.2.2 Other University Policies relating to ESG factors, as relevant;

15.3 Investment Managers are required to report at least annually, to the University or the University's external investment consultants, on ESG matters.

15.4 The University is committed to ESG integration in the management of the Investment Portfolio, and as such, the processes and procedures associated with ESG considerations shall be reported annually to the Chief Operating Officer under the University's Sustainable Initiatives Program.

16. Performance Monitoring and Reporting

16.1 The University Investment Portfolio and each Investment Pool's performance will be monitored separately on a monthly, quarterly and annual basis, with an annual assessment of rolling one, three, five, and ten-year results.

16.2 The principal goals in monitoring the Portfolio are to assess:

16.2.1 The performance and effectiveness of the Portfolio, and Investment Pools as a whole, against the objectives as outlined in this Policy;

16.2.2 The performance of each Investment Manager against their relevant benchmarks;

16.2.3 The management of associated investment risks; and

16.2.4 That this Policy has been strictly complied with.

16.3 The Chief Financial Officer shall provide reports quarterly and annually to the Strategic Resources Committee.

16.4 The Portfolio and Investment Pools shall be monitored relative to an appropriate published survey and calculated composite benchmark return, using the market indices as detailed in Attachment G and approved by the Chief Financial Officer and/or Chief Operating Officer and included in the quarterly investment report to the Strategic Resources Committee.

16.5 The Long Term Pool Spending Policy under clause 11.7.2 shall be monitored against the amount the University determines maintains the capital value against inflation (CPI) over time, based on the excess of the 10-year rolling return over CPI on an annualised return basis.

16.6 University appointed Investment Managers are subject to a regular review of performance and:

16.6.1 The University or an Investment Consultant on behalf of the University will conduct interviews of each Investment Manager from time to time;

16.6.2 Investment Managers may be reviewed and/or replaced if they fail to achieve or are assessed to be likely to fail to achieve in the future the objectives set, or where in the opinion of the University there is a material change in the Investment Manager or University Policy, such that it puts at risk the ability of the Investment Manager to retain the appointment to the satisfaction of the University.

16.7 The Chief Financial Officer shall report to the Strategic Resources Committee on the appointment, material amendment and/or termination of any Investment Manager.

16.8 Any non-compliance with this Policy shall be reported immediately to the Chief Financial Officer and where material the Chief Operating Officer, Vice Chancellor and/or Chair of the Strategic Resources Committee; and to the next scheduled meeting of the Strategic Resources Committee.

16.9 Any remedial action to resolve material non-compliance with this Policy shall be approved by the Chief Operating Officer and Vice Chancellor on the recommendation of the Chief Financial Officer.

17. Transitional Provisions

17.1 Any material change to this Policy may give rise to a period of transition and will be subject to:

17.1.1 A transitional implementation period as approved by the Vice Chancellor and Chief Operating Officer, on the recommendation of the Chief Financial Officer; and

17.1.2 Any transitional periods exceeding three months will be reported to the Strategic Resources Committee including details on non-compliance arising from the transition.

17.2 Any investment of contributor funds may be subject to transitional arrangements including;

17.2.1 The investment in the Short Term Pool prior to the determination of the fund's specific investment strategy under clause 7.3 (if required); and

17.2.2 The amendment of the Long Term Pool spending policy under clause 11.7.2 to be based on an appropriate shorter period of the average 12 or 24 monthly balance.

18. Review of Policy

18.1 This Policy shall be formally reviewed at least every two years, or more frequently if circumstances warrant.

18.2 An Investment Consultant shall be appointed to undertake an external independent review:

18.2.1 Every four years; and

18.2.2 At any time should the extent or type of change recommended be considered materially significant.

18.3 The Policy reviews shall be conducted by the University and proposed amendments on the recommendation of the Chief Financial Officer presented to Strategic Resources Committee for recommendation to Senate.

19. Effective Date of Policy

19.1 The Policy comes into effect immediately upon being approved by Senate and replaces any previous policies, unless otherwise resolved by Senate.

Related forms: (Link)

Policy No: UP09/13

Approving body or position: Senate

Date original policy approved: 2001

Date this version of policy approved: March 2015

Date policy to be reviewed: August 2017

Date this version of procedures approved:

TRIM File No: March 2015

Contact position: Manager Treasury & Investments, Financial Services

Related Policies or legislation:

The University of Western Australia Act 1911Trustees Act 1962

University Policy 07/1: Funding from the Tobacco Industry

University Policy 13/13: Charitable Gift Acceptance