F–5

F–5/206-15 6/11/15

VII. STANDING COMMITTEES B. Finance and Asset Management Committee UW Investment Committee (UWINCO) Update There will be an oral report for information only. Attachment UW Investment Performance Report, Third Quarter Fiscal Year 2015

University of WashingtonInvestment Performance Report

Third Quarter Fiscal Year 2015

as of March 31, 2015

Treasurer Board of RegentsTreasury Office

Published May 2015

ATTACHMENTF–5.1/206-15 6/11/15

table of contents

University of WashingtoninvestMent PerforMance rePort

third QUarter fiscal year 2015

As of March 31, 2015

Treasury Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

CEF Asset Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

CEF Performance Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

CEF Performance Update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

CEF Activity and Campus Support from Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

CEF Exposures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Invested Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

F–5.1/206-15 6/11/15

treasUry assets 1 as of March 31, 2015$5,018 ($ = Millions)

1 Assets whose management falls under the auspices of the Finance & Asset management Committee of the Board of Regents, excluding Metro Tract and Forest Trust Lands.

2 The Invested Funds Diversified Investment Pool holds Consolidated Endowment Fund units valued at $763 million. To avoid double counting, the dollars are included only in the Consolidated Endowment Fund (CEF) total.

3 Proceeds from sale of land grants and subsequent investment returns on deposit with the state of Washington. 4 Capital Assets Pool (CAP) consists of UW internally financed projects. 5 Bond Retirement Fund and Building Fund. 6 Debt service reserve funds and construction project funds which have not yet been disbursed.

Endowment & Similar FundsEndowment Funds $2,252Operating Funds 2 763Consolidated Endowment Fund $3,015Life Income Trusts 85Outside Trusts 108Non-CEF Endowments 12Permanent Fund 3 36 $3,256

Operating &Reserve Funds

$1,762

Endowment &Similar Funds

$3,256

1

Operating & Reserve Funds

Invested Funds Cash & Liquidity Pools 2 $1,622Invested Funds Capital Assets Pool 4 86Funds on Deposit w/State of Washington 5 15Bond Proceeds and Reserves 6 39

$1,762

F–5.1/206-15 6/11/15

PRP EA

CL IAA TTI IOPA NC

consolidated endoWMent fUnd (cef) asset allocation

for the QUarter ending March 31, 2015

1 Uncalled capital commitments: 11%

Target RangePolicy Current Allocation ($ = Millions)

Note: Percentages may not sum due to rounding

Opportunistic2%

2

Developed Markets Equity

37%

Private Equity

11%

Real Assets6%

Absolute Return

17%

Fixed Income

8%

Emerging Markets Equity

18%

Emerging Markets Equity $555 18% 17%

Developed Markets Equity $1,121 37% 28%

Private Equity $328 11% 15%

Real Assets $195 6% 7%

Opportunistic $59 2% 3%

Capital Appreciation $2,258 75% 70% 55%–85%

Absolute Return $505 17% 19%

Fixed Income $252 8% 11%

Capital Preservation $757 25% 30% 15%–45%

Total CEF 1 $3,015 100%

F–5.1/206-15 6/11/15

cef PerforMance sUMMary for the QUarter ending March 31, 2015

NACUBO/Commonfund Endowment Study 1 10-Year Growth of $10,000: CEF vs. Passive Alternatives

Rolling Year Returns 1 (%) Fiscal Year Returns 1 (%)

1-Year 3-Year3rd Qtr

FY 2015FYTD2015 FY ’14 FY ’13 FY ’12 FY ’115-Year 10-Year

1 Total Return: average annual compound return (dividend or interest plus capital appreciation or depreciation)

Rolling Years Fiscal Years

Total CEF Return 3.6 9.7 10.8 9.1 7.5

70% MSCI ACWI/30% BC Govt Bond 2 .3 5 .8 8 .7 8 .1 6 .6

Capital Appreciation 4.2 11.1 12.9 10.7 8.3

MSCI ACWI 2 .4 6 .0 11 .3 9 .6 7 .0

Capital Preservation 1.8 5.6 5.5 4.4 4.5

BC Government Bond 1 .6 5 .2 2 .3 3 .8 4 .5

Total CEF Return 5.2 15.8 13.5 -0.9 16.0

70% MSCI ACWI/30% BC Govt Bond 1 .7 16 .8 11 .3 -1 .3 21 .8

Capital Appreciation 6.0 18.8 17.0 -1.9 21.5

MSCI ACWI 0 .7 23 .6 17 .2 -6 .0 30 .8

Capital Preservation 2.7 8.0 5.9 1.2 3.6

BC Government Bond 3 .8 2 .1 -1 .5 8 .3 2 .3

1 Year 3 Years 5 Years 10 Years

3

2nd Quartile 2nd Quartile 3rd Quartile 1st Quartile

University of Washington

NACUBO/Commonfund Median Returns

1 Total Return: Average annual compound return (dividend or interest plus capital appreciation or depreciation)

15.8%

11.2%

9.2%8.0%

15.8%

11.8%

8.9%

7.0%

$20,608

$18,970

$21

19

17

15

13

11

9

7

$ =

000

’s

1 As of June 30, 2014

’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15

CEF

70% ACWI & 30% BC Gov

F–5.1/206-15 6/11/15

cef PerforMance UPdate

1 Total Return: Average Annual Compound Return (dividend or interest plus capital appreciation or depreciation)2 Reported on a quarter lag3 Preliminary

Total Return 1 As of March 31, 2015 3rd Qtr FY ‘15 1 Year 3 Years 5 Years 10 Years

Consolidated Endowment Fund 3.6 9.7 10.8 9.1 7.5

70% MSCI ACWI & 30% BC Gov’t Bond (Benchmark) 2 .3 5 .8 8 .7 8 .1 6 .6

Capital Appreciation 4.2 11.1 12.9 10.7 8.3

MSCI ACWI (Benchmark) 2 .4 6 .0 11 .3 9 .6 7 .0

Emerging Markets Equity 6 .1 13 .7 8 .4 8 .0 12 .9

Developed Markets Equity 4 .3 9 .4 14 .2 11 .5 7 .2

Opportunistic (started 7/1/2010) 3 .4 8 .9 16 .7 -- --

Subtotal 4.8 10.7 12.7 -- --

MSCI ACWI (Benchmark) 2 .4 6 .0 11 .3 9 .6 7 .0 Private Equity 2 7 .3 15 .4 15 .9 13 .4 11 .5

PE Benchmark 2, 3 3 .8 14 .9 15 .8 15 .4 11 .6 Real Assets 2 -6 .0 7 .1 9 .9 9 .0 4 .7 RA Benchmark 2, 3 -4 .8 3 .8 7 .4 10 .2 8 .0

Capital Preservation 1.8 5.6 5.5 4.4 4.5

BC Government Bond (Benchmark) 1 .6 5 .2 2 .3 3 .8 4 .5 Absolute Return 2 .3 7 .0 7 .6 6 .4 7 .0 Policy Benchmark 3 1 .7 3 .6 4 .7 3 .2 4 .5 Fixed Income 0 .7 2 .5 1 .8 1 .8 2 .7 BC Government Bond (Benchmark) 1 .6 5 .2 2 .3 3 .8 4 .5

Market Indices

S&P 1 .0 12 .7 16 .1 14 .5 8 .0 Russell 2000 4 .3 8 .2 16 .3 14 .6 8 .8 MSCI EAFE 5 .0 -0 .5 9 .5 6 .6 5 .4 MSCI EMF 2 .3 0 .8 0 .7 2 .1 8 .8 BC High Yield 2 .5 2 .0 7 .5 8 .6 8 .2

4F–5.1/206-15 6/11/15

cef activity and caMPUs sUPPort froM investMents as of March 31, 2015$ = Millions

5

Beginning Balance $2,833 $2,347 $2,111 $1,897 $1,335 $1,151

Gifts 44 71 48 312 719 931

Transfers 6 7 6 33 89 117

OperatingFundsPurchases 81 146 11 290 360 447

Total Additions $131 $224 $66 $636 $1,168 $1,495

NetInvestmentReturn 148 379 279 1,027 1,527 1,694

Distributions (78) (94) (87) (435) (815) (1,081)

AdvancementSupport (16) (19) (17) (88) (160) (193)

AdministrativeFees (4) (5) (4) (22) (40) (50)

Ending Balance $3,015 $2,833 $2,347 $3,015 $3,015 $3,015

CEFDistributions $78 $94 $87 $435 $815 $1,081

AdvancementSupportfromCEF 16 19 17 88 160 193

InvestedFundsDistribution1 0 36 38 192 423 675

Total Campus Support $94 $148 $143 $715 $1,398 $1,950

FY 2013FY 2014 5 Years 10 Years 15 Years

Rolling Years

Note: Numbers may not sum due to rounding

CEF Activity

Campus Support from Investments

   FYTD   2015   

1 Invested Funds Distributions occur annually at fiscal year end.

F–5.1/206-15 6/11/15

6

cef exPosUres for the QUarter ending March 31, 2015

1 Emerging Markets, Developed Markets, Real Assets and select Absolute Return equity1 At 3/31/15 foreign currency exposure: 33%

Equity Sector Exposure 1

Short-Term Liquidity Estimates as % of CEFExposure by Strategy

Geographic Exposure 1

InformationTechnology

15%

Industrials14%

Financials 19%

Health Care 11%

ConsumerDiscretionary

14%

ConsumerStaples

10%

Energy 9%

Japan: 3%

Utilities: 2%

Materials: 4%

Telecom: 2%

EM Latin America: 3%EM EMEA: 3%

Dev . Asia ex . Japan: 4%

Absolute Return

Fixed Income

RealAssets

PrivateEquity

Opportunistic

2015

2014

2013

North America63%

EM Asia: 14%

Developed Europe: 10%

CapitalAppreciation

CapitalPreservation

27%

43%

60%

79%

Weekly Monthly Quarterly 1 Year

EmergingMarkets

Developed Markets

Note: Percentages may not sum due to roundingF–5.1/206-15 6/11/15

Range

invested fUnds for the QUarter ending March 31, 2015

Total Return 1 (%) Fund Allocation by Pool($ = Millions)

1 Total Return: average annual compound return (dividend or interest plus capital appreciation or depreciation).2 DIP: Diversified Investment Pool is designed to improve the risk profile and/or enhance the IF performance through

investment in CEF units or other investment vehicles.3 Capital Assets Pool (CAP) consists of UW internally financed projects.

1 Diversified Investment Pool (DIP) currently consists of CEF units which are included in the CEF market value.2 Capital Assets Pool consists of UW internally financed projects.

Fund Allocation Actual Maximum

Durationin Years

Cash Pool $772 31% 10% – 40% 0 .7 3 .0

Liquidity Pool $850 34% 25% – 60% 2 .6 5 .0

Diversified Investment Pool 1 $763 31% 15% – 45%

IF Excluding CAP $2,384 97%

Capital Assets Pool 2 $86 3% 0%–15%

Total Invested Funds $2,470 100%

Mix of Investments: IF Excluding CAP

Treasuries & Agencies

41%

MortgageRelated

17%

CEF Units32%

Asset-Backed Securities: 7%

7

1-Year 3-Year3rd Qtr

FY 2015 5-Year 10-Year

Cash & Liquidity Pools 0.6 1.7 1.3 2.0 3.2 Weighted Benchmark 0 .9 2 .1 1 .1 1 .9 3 .2

IF including DIP 2 Units 1.5 4.1 3.6 3.8 4.3 Weighted Benchmark 1 .3 3 .2 3 .0 3 .6 4 .5

IF including DIP 2 & CAP 3 1.5 4.1 3.6 3.8 4.3

Cash Equivalents: 3%

$15,200

$13,640

$16

15

14

13

12

11

10

9

$ =

000

’s

’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15

10-Year Growth of $10,000: Impact of Diversified Asset Pool (DIP)

IF Including DIP

IF Excluding DIP

F–5.1/206-15 6/11/15