SEI Releases White Paper on Liquidity Pool Management for Colleges and Universities
White Paper Showcases Short-Term Asset Pool Trends and Strategies
SEI (NASDAQ: SEIC) today released a white paper on trends and best practices in liquidity pool management for U.S. colleges and universities. As part of the research, SEI surveyed 52 higher education institutions to examine the various governance structures and strategies currently used to manage their shorter-term investment pools.
More than three-quarters (76 percent) of participating schools have balance sheet and/or operating investments that are managed separately from the endowment assets, either by university finance staff (63 percent) or foundation staff (13 percent). The remaining schools generally combine their short-term pools with endowment assets into one pool, which is managed by the foundation.
The research also found that about two-thirds of respondents have high confidence in their ability to manage these multiple asset pools holistically in accordance with their institution's broader financial goals. When it comes to risk management, however, nearly half said they are not very confident in their institution's ability to quantify total financial risk across all asset pools.
"Every institution has its own unique approach to managing their multiple asset pools, as demonstrated in the paper's research. The challenge is to manage them in a way to best compliment and support broader institutional objectives," said Mary Jane Bobyock, Director of the Nonprofit Advisory Team, SEI's Institutional Group. "The longer-term strategies of the endowment pools need to work in conjunction with other shorter- and intermediate-term pools in order to best support day-to-day operating needs and expenses, while mitigating unnecessary balance sheet risk."
In addition to the survey findings, the white paper includes a university case study demonstrating how multiple nonendowment pools impact a university's balance sheet. The analysis shows how various portfolio returns at different probability levels impact key financial metrics. Using this information, the sample university is able to analyze the potential impact of changing their allocation in a search to enhance returns within a risk-managed framework. For the full paper, please visit: seic.com/higherEdpoll2016.
About SEI's Institutional Group SEI's Institutional Group is one of the first and largest global providers of outsourced investment management services. The company delivers integrated retirement, healthcare and nonprofit solutions to 470 clients in eight countries. Our solutions are designed to help clients meet financial objectives, reduce business risk and fulfill their due diligence requirements through implemented strategies for the management of defined benefit plans, defined contribution plans, endowments, foundations and board designated funds. For more information visit: seic.com/institutions.
About SEI SEI (NASDAQ: SEIC) is a leading global provider of investment processing, investment management, and investment operations solutions that help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of December 31, 2015, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $670 billion in mutual fund and pooled or separately managed assets, including $262 billion in assets under management and $408 billion in client assets under administration. For more information, visit seic.com.