University of California Investments grows portfolio to $140 billion during tumultuous year
The University of California’s Office of the Chief Investment Officer (UC Investments) announced today (Sept. 15) that its assets under management grew to $140 billion as of August 31, 2020, a $10 billion jump from the end of the fiscal year on June 30, 2020. That represents a 47 percent increase since 2014.
“This year has certainly been one for the record books,” said Chief Investment Officer Jagdeep Singh Bachher. “A deadly pandemic, economic pain, social unrest — there’s uncertainty all around. More so than ever, we’ve focused intensely on helping the university and its many stakeholders, and it’s worked. We’re well positioned to keep building upon this year’s short — and most important — long-term gains.”
Said UC Regent Richard Sherman, chair of the Investments Committee, “Jagdeep and the UC Investments team have taken important and well thought-out steps to get us where we are today. There are steady hands on the wheel, which is of paramount importance during a crisis such as the one we’re in.
“The strategy is long term, assessing every opportunity through a lens of risk. Selling fossil fuel assets is already paying off. So, too, is doubling down on innovation and taking advantage of the wealth of research and knowledge that the UC system provides.”
“I look forward to continuing to work with UC Investments as we navigate through these unprecedented challenges to our university,” said UC President Michael V. Drake, M.D. “The investments team is in the business of both helping to ensure UC’s long-term financial future as well as finding creative solutions in the short term.”
UC’s $140 billion is spread across seven unique financial products. As of August 31, 2020, the endowment stood at $15 billion, up $1 billion from June 30, 2020, and nearly $2 billion from the prior year. The endowment’s one-year return rate, from June 30, 2019 to June 30, 2020, was 5 percent. The three-year return rate was 7.4 percent, the five-year rate, 6.5 percent, the 10-year rate, 8.8 percent and the 25-year rate, 8.5 percent.
The pension stood at $76.1 billion as of August 31, 2020, up from $70.2 billion on June 30, 2020, and just over $6 billion from the prior year. The pension’s one-year return rate, from June 30, 2019 to June 30, 2020, was 1.7 percent. The three-year return rate was 5.1 percent, the five-year rate, 5.4 percent, the 10-year rate, 8.2 percent and the 25-year rate, 7.8 percent.
Working capital, the earmarked funds from individual campuses that UC Investments manages on their behalf, stood at a combined $17.9 billion as of June 30, 2020 — $10.5 billion in the short term pool (STIP), and $7.4 billion in total return (TRIP) — an increase from $14.8 billion in the prior year. The one-year rate of return for STIP was 1.9 percent and TRIP was 1.7 percent. The Blue & Gold pool, created last year, returned the entirety of its assets to UC campuses in 2020.
The retirement savings program ended the fiscal year at $27.1 billion, an increase of $1.5 billion from June 30, 2019. Fiat Lux Insurance stood at $1.2 billion on June 30, 2020, up $95 million since June 30, 2019.
Performance results, the pension asset allocation and efforts around diversity, equity and inclusion will be discussed at the September 15, 2020, meeting of the UC Board of Regents’ Investments Committee. Results are available online here.