INVESTMENT AND CAPITAL MANAGEMENT REPORT

Investment and Capital Management (ICM) is charged with managing the University of Sydney’s endowment and trust assets, investment funds and commercial real estate investments. The ICM team is highly experienced with several members having spent more than 15 years in the financial markets. All University funds invested in debt securities are managed internally by the team, while funds invested in growth assets are managed externally by professional sector specialist managers. The team is supported by an external consultant adviser.

Given the perpetual nature of the University’s donated funds, ICM seeks to generate an optimal risk-adjusted total return through the employment of a structured long-term investment philosophy based around strategic asset allocation targets.

Long-term endowment funds performance in 2010

Long-term endowment funds generally consist of bequests and endowments.

The year witnessed a consolidation in equity markets across the world, as developed economies experienced a return to economic growth and expansion. Following the 2009 rebound, the MSCI World (ex-Australia) Accumulation Index (hedged) closed the year 13.1% higher and the Australian equity market ended 2010 up by 1.6 percent.

The return on the University’s long-term funds was above the relevant NSW Treasury Corporation Hour-Glass Facility over the one-, two- and three-year periods.

Notes: (1) The University’s performance returns are after underlying external manager fees and equivalent NSW Treasury Corporation administration fees, and inclusive of franking credits. (2) The NSW Treasury Corporation manages the Hour-Glass Long-term Growth Facility, and is comparable to the University’s Long-term funds in nature. The facility’s returns are after fees. Past performance is not a reliable indicator of future performance.

If you would like a copy of ICM’s 2010 investment report please email .