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Investment Procedures

– December 2023

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INVESTMENT

PROCEDURES

Procedure
Type:

Board

Initially
Approved:

February 10,
2014

Procedure
Sponsor:

Board of Governors

Last
Revised:

December 2023

Administrative
Responsibility:

VP, Finance and
Administration

Review
Scheduled:

December 2025

Approver:

Executive Leadership Team

OVERVIEW

Mount Royal University Investment Procedures will serve to clarify the processes required to
ensure compliance with the Investment Policy.

PURPOSE

These Procedures will define the procedure(s) for measuring the investment performance of
University funds and the investment manager(s) and managing investment income.

SCOPE

These Procedures extend to all funds held by the University.

PROCEDURES

VALUATION OF INVESTMENTS

1.1

The Investment Fund value is captured both in terms of book and market value
and denominated in Canadian dollars.

1.2

Investments in publicly traded securities and pooled funds shall be valued no less
frequently than monthly at their market value.

1.3

Investment in indexed funds comprised of publicly traded securities shall be valued
according to the unit values published at least monthly by the Manager.

1.4

If a market valuation of an investment is not readily available, then a fair value shall
be determined by the Manager.  For each such non-traded investment, an estimate
of fair value shall be supplied to the Fund's Custodian and reported to the Board
no  less  frequently  than  quarterly.    In  all  cases,  the  methodology  utilized  for
estimating fair value should be applied consistently over time.

Investment Procedures

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1.5

The calculation of the rate of return is to include capital gains, dividends, interest
and other income gross of all investment management expenses. The investment
return objective of investment funds is to approximate as closely as practicable the
appropriate benchmark index performance in every period.

1.6

The nature of the investment markets will change over time, and accordingly, the
Fund's objectives will be reviewed by the Board of Governors from time to time.

FUND PERFORMANCE

An overall analysis of Fund performance shall be prepared and reviewed by the Board of
Governors quarterly.

INCOME

The allocation of earnings will depend upon the funding restrictions. The general policy is
that all earnings will be pooled together and allocated to the University's general revenue,
with the following exceptions:

3.1.

Endowments

Income earned on endowment funds will be allocated in accordance with the Endowment
Management Policy.

3.2.

Special Purpose and Capital Funds

Earnings on special purpose and capital funds as required by funding agreements will be
allocated proportionately to each individual fund based upon its beginning quarter balance,
as required by stipulations imposed by the funding source.

3.3.

Students Investment Fund

Earnings  on  the  Students  Investment  Fund,  established  by  MRU  for  the  educational
purposes  and  managed  by  the  designated  faculty  and  students,  are  allocated  to  the
University general fund until such time when the decision is made by the Board to allocate
it to a special purpose fund.

3.4. Supplemental Pension Plan

Earnings  on  the  Supplemental  Pension  Plan  for  Designated  Executives  and  Senior
Leaders of MRU  will be used for the purpose  of future disbursements from the  Pension
Plan to its beneficiaries.

SPENDING

The spending of earnings will depend upon the Fund's classification as determined in the
recording of the income. The general policy is that spending will occur based on the
requirements imposed in the University's fund classification. The following are specific
restricted fund spending policies:

4.1

Endowments

Income earned on Endowments will be spent in accordance with the
specific terms and conditions of each trust.

Investment Procedures

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Unspent income as at the end of each fiscal year will be allocated in
accordance with the Endowment Management Policy.

In  some  years,  the  spending  allocation  made  in  accordance  with  the
Endowment Management Policy may exceed investment returns.  In such
cases, the University is permitted to temporarily encroach on Endowment
funds  provided  the  encroachment  will  be  reversed  as  proceeds/funds
become  available  to  replenish.    Where  such  annual  Endowment
encroachment  occurs,  management  must  report  the  same  at  the  next
meeting of the Finance Committee and the Board of Governors; the report
should include a projection and plan for replenishment.

In cases where the annual spending allocation to an individual Endowment
is insufficient to meet requirements, temporary encroachment on the
Endowment fund may be allowed with a replenishment plan where
approved by the Vice-President, Finance and Administration.

4.2

Special Purpose Funds

Expenditures will be made from Special Purpose funds only for the specific
purposes designated by the terms and conditions.

4.3

Capital Funds

Expenditures will be made from capital funds only for the specific purposes
designated by the external parties that contributed the funds.

4.4

Supplemental Pension Plan

Disbursements from Supplemental Pension Plan will be made only for funding of
the pension supplements to the persons designated as beneficiaries of such Plan.

DEFINITIONS

(1)

Board/Board of
Governors:

the Board of Governors of Mount Royal University

(2)

Endowments:

donor gifts with external stipulations requiring that the principal
be held in perpetuity with earnings being spent for an intended
purpose.

(3)

Finance Committee:

the Finance Committee of the Board of Governors

(4)

Fund:

the total of all funds under management of the University.

(5)

Manager(s):

external

professional

investment

management

firm(s)

authorized and contractually engaged for investment of
University funds for specific Asset Class(es) noted within the
Investment Policy.

Investment Procedures

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(6)

Policy:

means the Investment Policy.

(7)

Restricted Funds:

funds with external stipulations; may require that the principal
be held in perpetuity; and, always with earnings being spent for
an intended purpose.

(8)

University:

means Mount Royal University

(9)

University Funds:

all funds held by the University, regardless of source or
purpose; in totality also referred to as the Fund

(10)

Working Capital:

unspent unrestricted funds held by the University for the
purpose of its operational activities

RELATED POLICIES

● Investment Policy
● Endowment Management Policy

RELATED LEGISLATION

● Alberta Post-Secondary Learning Act.

RELATED DOCUMENTS

●  Code of Ethics and Standards of Professional Conduct of the CFA Institute
●  Endowment Management Policy Procedures
●  Investment Mandate Allocation – Appendix A to the Investment Policy
●  Investment Managers’ Accountability Checklist – Appendix B to the Investment Policy

● Investment Manager Mandate Statements

REVISION HISTORY

Date
(mm/dd/yyyy)

Description of
Change

Sections

Person who
Entered Revision
(Position Title)

Person who
Authorized
Revision
(Position Title)

02/10/2014

NEW

09/30/2021

Removed reference
to passive
management

Enhanced the
distinction between
the Long-Term
Investments and
Short-Term
Investments, as well
as the Endowed
principal and
unendowed working
capital shares of the

1.6

3

Finance Partner

AVP Finance and
Commercial
Operations