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Investment Management policy

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Section 1 - Preamble

(1) This Policy was approved by Council on 24 September 2012 and incorporates all amendments to 7 March 2017.

(2) This Policy is governed by the following legislation:

  1. Borrowing and Investment Powers Act 1987 (Vic)
  2. Deakin University Act 2009 (Vic)

(3) This Policy includes the following schedule:

  1. Schedule A: Investment Objectives and Asset Allocations
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Section 2 - Purpose

(4) This Policy guides the responsible and effective management of the University's investments.

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Section 3 - Scope

(5) This Policy applies to all financial investments monitored by the Investment Committee from funding allocated by University Council.

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Section 4 - Policy

(6) The University adopts a conservative investment management style.

(7) The University will ensure that a sufficient cash reserve is maintained within the Short-Term Investment Pool at all times to meet the University's requirements.

(8) The University will use its investment returns from the Long-Term Investment Pool to provide a source of funding for expenditure into perpetuity which ensures funding is independent of the University's operational performance at any point in time.

(9) The University may maintain an Environmental, Social and Governance (ESG) Pool specialising in ESG focused managers and other sustainable investments (see Framework for the Environmental, Social and Governance Pool).

(10) The University will endeavour that its investments are undertaken in a manner that befits a contemporary university incorporating appropriate Environmental, Social and Governance (ESG) considerations with the ultimate aim of meeting its stated investment objectives. These considerations will be part of an ESG investment plan that balances financial outcomes with ESG imperatives.

Council ensures responsible and effective management

(11) University Council, on advice from the Investment Committee, will ensure the responsible and effective management of the University's investments in accordance with Section 46 of the Deakin University Act 2009 (Vic).

Investment Committee oversees performance

(12) The IC, in accordance with its terms of reference, will oversee the performance of the University's investments and will provide strategic advice and as required make recommendations to University Council on these matters.

Asset allocations

(13) In the Short-Term Investment Pool the University will only invest directly in cash and fixed interest investments, in accordance with the investment objectives and asset allocations set out in Schedule A: Investment Objectives and Asset Allocations.

(14) In the Long-Term Investment Pool the University will allocate its investments across a range of asset classes, in accordance with the investment objectives and asset allocations set out in Schedule A: Investment Objectives and Asset Allocations.

Appointment of investment managers

(15) The IC may appoint investment managers to manage the whole or part of the University's investments, and will determine the amounts to be allocated to such managers.

External environment

(16) If between IC meetings, management, the appointed investment adviser, or any member of the Committee becomes aware of major change(s) in external factors that, in their opinion, is likely to significantly impact the performance/valuation of the University's investments they will endeavour to notify the CFO (in the case of management or appointed adviser) or the Chair (in the case of members of the Investment Committee) of the details.

(17) The CFO and the Chair, IC will discuss the details and determine if a meeting or a meeting via circular resolution is required to resolve a course of action.

(18) The Secretary, IC will arrange the meeting or a meeting via circular resolution of the Investment Committee, as required.

Reporting

(19) Investment managers will report monthly performance and valuation information, together with investment commentary.

(20) The Director, Corporate Finance will provide a report on the University's investments to each IC meeting.

(21) After each IC meeting, the Investment Committee will report as soon as practicable, to the University Council on the University's investments.

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Section 5 - Procedure

(22) There is no attendant procedure.

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Section 6 - Definitions

(23) For the purpose of this Policy:

  1. Cash: investments in 11am cash deposits, cash deposits, term deposits (and variants of term deposits) or bank accepted bills.
  2. Cash Bank Bill Rate: the rate of interest on a bill of exchange of which the acceptor or endorser is a bank, as published in the Bloomberg AusBond Bank Bill Index.
  3. Consumer Price Index (CPI) inflation: the core rate of inflation as defined by the Reserve bank of Australia (RBA).
  4. Strategic Asset Allocation (SAA): the targeted level of investment in an asset class.