Updated February 2024
The purpose of the Cambridge University Endowment Fund is to serve the University of Cambridge, colleges and trusts by delivering world-class, sustainable investment performance.
Our unique position as a steward of assets for investors in the Endowment Fund confers both investment advantages and a reputational responsibility which must be respected.
In support of its mission, University of Cambridge Investment Management (“UCIM”) abides by core investment principles about markets and investor behaviour; these drive our investment decision-making and are underpinned by our values of integrity, collaboration, accountability, intellectual honesty, excellence, and sustainability.
These investment principles convey the philosophy of UCIM’s approach and outline how they are implemented in practice.
Our governance structure should support our mission and our values. Support and challenge from the UCIM and Investment Advisory Boards and the Cambridge University Endowment Trustee Body are essential to optimal decision-making.
Our long-term investment horizon is one of our key advantages; to benefit from it fully requires patience as well as the confidence to adopt a contrarian point of view.
The generation of attractive long-term investment returns is dependent on stable, well-functioning, and well-governed social, environmental and economic systems, including financial markets. Positioning the CUEF to prosper in a future net zero economy is consistent with meeting its long-term risk-adjusted investment return objectives.
Diversification is a key driver of long-term portfolio performance. While asset allocation and manager selection interact, they should be considered separately in investment decision-making.
We believe that we should invest actively with high conviction to generate superior risk-adjusted returns over the long-term. We evaluate each investment opportunity from first principles. If an appropriate manager cannot be found, we may use passive investments to achieve our investment goals.
Manager selection is a key source of excess returns. We seek to partner with third-party specialists with differentiated insights, disciplined processes and high integrity, whose interests and incentives are aligned with those of our stakeholders.
Risk should be considered both at the portfolio, manager, and asset level; all risk is relative to the return available.
We invest as a team. Every team member has an obligation to express their opinion on every prospective investment. Once a decision is made, it is made with the support of the full team.
Diverse teams and diversity of thought are essential components of the high-quality decision-making required to generate outstanding risk-adjusted returns.
Behaving as an active owner through monitoring, engaging with, and holding asset management partners to account on their investment principles and policies will contribute to better financial, social and environmental outcomes in the long term as well as magnifying the impact of the CUEF’s investments.