Attachment No. 1 - SMCM Foundation, Inc Investment Policy.pdf

St. Mary’s College of Maryland Foundation

Investment Policy

Adopted as of September 20, 2016

SMCM RFP Investment Services - Attachment No. 1

I. Mission and Organization

A. Mission: St. Mary’s College of Maryland (“College”) seeks to offer the combination of two ideals: the promise of public education, affordable to all and thriving on diversity, and high standards of academic excellence. The College is committed to continuing its mission of providing an excellent education, regardless of students’ ability to pay, through the use of scholarship endowments, faculty enrichment and other such methods as determined by the College’s Board of Trustees (“College Board”).

B. St. Mary’s College of Maryland Foundation: The purpose of the St. Mary’s College of Maryland Foundation (“Foundation”) is to support the College in its educational endeavors. The Foundation is expected to operate in perpetuity.

C. Board of Directors: The Foundation Board of Directors (“Foundation Board”) bears the overall fiduciary responsibility for the Foundation. As such, the Foundation Board is ultimately responsible for making the decisions that affect the Foundation’s investment policy and practices, portfolio objectives and operations, asset allocation, investment advisor hiring and firing, and such other activities and services as may be determined to fulfill its responsibilities.

The Foundation Board must act prudently, avoid conflicts of interest, and strive to achieve long-term results consistent with the needs of the Foundation within the economic environment in which it operates. It is the responsibility of the Foundation Board to undertake an annual review of all operations under its authority, including the responsibilities of its Directors and staff and the resources at their disposal, a review of the investment policy statement, and an assessment of investment performance.

II. The Saint Mary’s College of Maryland Foundation Investment Policy.

A. Purpose. The purpose of The Saint Mary’s College of Maryland Foundation Investment Policy (“the Investment Policy”) is to give guidance to the Board of Directors (the “Board”) of the St. Mary’s College of Maryland Foundation (the “Foundation”), the Joint Investment Advisory Committee (the “JIAC” or the “Committee”) of the Foundation, and the Staff of the Foundation, as it pertains to the investment and management of the Foundation’s funds designated for investment (the “Investment Funds”). Long-term investment objectives, policies and a prudent investment program are essential tools for the Board and the JIAC in carrying out their fiduciary responsibilities with regard to the management and investment of the Foundation’s Investment Funds. In the pursuit of its investment objectives, the Board may engage the services of one or more investment advisors (each, an “Investment Advisor”), who, in turn, may assist in the selection of investment managers of the funds invested by the Foundation.

This Investment Policy also assists the JIAC in guiding Investment Advisors in the performance of their duties.

B. Investment Policy Review. The JIAC will review this Investment Policy on an annual basis and make any recommendations for changes to the Foundation Board. The Foundation staff will communicate any revisions in writing to the Investment Advisors as necessary.

III. The JIAC.

A. General. To efficiently manage its investment responsibilities, the Foundation Board has created the Joint Investment Advisory Committee (JIAC, a working committee comprised of members of the Foundation Board and members of the College Board of Trustees) as an advisory committee to the Foundation Board to coordinate the activities of investment manager(s) and other independent firms or people engaged to provide investment services, to study issues pertinent to the investment policy, to coordinate investment activity with the College Board, to facilitate communication between the Foundation Board and the College Board regarding anticipated needs and available funding, and to report and make recommendations to the Foundation Board as necessary.

The Foundation Board charges the JIAC with the responsibility of implementing the investment policy which includes overseeing the management of the investment assets of the Foundation, to report regularly to the Foundation Board concerning investment performance and to make policy recommendations to the Foundation regarding the Foundation’s investment assets. The JIAC has the responsibility to ensure that the investment assets are managed in a manner consistent with Foundation policies and objectives including recommending the hiring and firing of investment managers. In this regard, the JIAC also has oversight responsibility for full compliance with all applicable laws and regulations, and must report to the Foundation Board any potential violations and compliance issues that may come to its attention.

The JIAC members shall discharge their duties solely in the interest of the Foundation and the College and for the exclusive purpose of meeting the financial goals of the Foundation and the College, consistent with the economic environment in which it operates. In the pursuit of its investment objectives, the JIAC may recommend the engagement of the services of Investment Advisors or Consultants who, in turn, may assist in the selection of investment managers for the Foundation’s assets. This Investment Policy also assists the Investment Committee in guiding Investment Advisors in performing their duties. Under the direction of the Foundation Board, the JIAC is authorized and permitted to guide the Investment Advisor in selecting and when necessary, discharging, investment manager(s) that possess the necessary resources, experience, and skills to meet the investment policy objectives and guidelines of the Foundation and the College. Accordingly, JIAC will instruct the Investment Advisor to select managers that will adhere to any investment policies adopted by the JIAC and by the Foundation Board.

Accordingly, the Investment Advisor will thoroughly explain the rationale for its recommendations and will regularly report to the JIAC on the performance of the investment managers and the overall portfolio.

B. Structure and Operations.

1. Composition and Qualifications. The JIAC will be comprised of five voting members: the President of the College, two members from the College Board, and two members from the Foundation Board.

2. Appointment and Removal. In accordance with the By-Laws of the Foundation, the Foundation members of the JIAC will be appointed by the Foundation Board for a term of one year at the annual meeting of the Board and will serve until such member’s successor is duly appointed or until such member’s earlier resignation or removal. The Chair of the College Board of Trustees will likewise appoint its serving members. Any member of the JIAC may be removed, by the respective Board responsible for that member’s appointment.

3. JIAC Chair. The JIAC Chair will be appointed by the members of JIAC and selected from the members of the JIAC. The term of office for the Chair will be one year.

The JIAC Chair will set the agendas for and chair Committee meetings. No member may serve as Chair for more than three consecutive 1-year terms. A stop-out of one year is permitted if a member has served three consecutive years and is appointed Chair thereafter.

C. Meetings.

The JIAC will meet at least quarterly, or more frequently as circumstances dictate.

The JIAC may invite to its meetings any director, any employee of the Foundation or College, and any other person with whom it deems appropriate to consult in order to carry out its responsibilities.

D. Duties and Responsibilities of the JIAC.

The following are the duties and responsibilities of the JIAC: These duties and responsibilities are subject to the overarching authority of the Foundation Board.

1. Align the investment goals of the Foundation with the financial needs of the College.

2. Establish and recommend investment objectives to the Foundation Board.

3. Authorization and supervision of the investment of the Investment Funds.

4. With the assistance of and upon the recommendation of the Foundation staff and/or Investment Advisors, establishment and review of an investment strategy consistent with the requirements, guidelines and principles articulated in the Investment Policy.

5. The recommendation of the engagement of Investment Advisors to advise the JIAC with respect to its investment duties and responsibilities.

6. The recommendation of appointment, supervision and termination of any individuals or entities to which investment management responsibility is delegated.

7. Authorization of the purchase and redemption of collective investment vehicles sponsored and managed by Investment Managers and the monitoring of the performance of those vehicles.

8. Prescribing from time to time the place and manner of safekeeping of securities and other investments of the Foundation and the manner of access to and withdrawal of the securities and investments.

9. Making Reports to the Foundation Board as follows:

a. The JIAC will regularly report to the Board material information regarding the Investment Funds, including performance, exposure to particular asset classes and other relevant information.

b. The JIAC will report to the Board any changes that it makes to the investment guidelines for the Investment Funds from time to time.

10. Oversight of the financial and cash management processes and methods utilized in the management of the Investment Funds, including the deposit and safekeeping of moneys, securities and other financial and investment assets of the Investment Funds.

11. Keeping contemporaneous detailed minutes of the JIAC meetings, especially with regard to reviewing allocations, recommending the approval of Investment Advisors, and reviewing the qualifications and performance of the Investment Advisors and Investment Managers.

12. To review its responsibilities at least annually and as necessary in the context of changing needs and market conditions. All recommended changes are to be brought before the Foundation Board for its approval, excepting asset and manager allocations as specified in the section “Asset Allocation”.

13. The carrying out of any other responsibilities and duties delegated to the JIAC by the Board from time to time.

IV. The Investment Advisor(s).

A. The investment advisor(s) will be responsible for the following:

1. Providing support, information, and recommendations to the JIAC with respect to its responsibilities, including:

a. Providing information as needed so that the JIAC can determine asset class structure and set long term asset allocation targets.

b. As required by the JIAC, providing an open dialogue with the JIAC concerning current market conditions as they relate to long term asset allocations and/or short term investment opportunities.

c. Evaluating and recommending Investment Managers and Investment Strategies to the JIAC, as appropriate and as detailed below.

2. Providing monitoring, statements and reporting capabilities to the JIAC.

a. Provide the JIAC with online access to view the Foundation’s accounts.

b. Provide detailed reporting to the JIAC in accordance with pre-scheduled meetings.

c. Work, in conjunction with the JIAC, on constructing the necessary performance reporting required for JIAC quarterly meetings. At a minimum, these reports should include common portfolio metrics, e.g., industry, significant company holdings (in dollars and by percent), yield on each holding, and for the portfolio as a whole, performance results for the most recent quarter, trailing one, three, and five years, as well as ten years and performance since inception.

d. Provide calendar quarterly statements with key information on each manager, including purchases and sales, income and expenses, and portfolio holdings at period end.

3. Participating in JIAC Quarterly Meetings.

a. The Investment Advisor is to participate in each JIAC quarterly meeting and address specific topics as specified by the JIAC.

b. The Investment Advisor will meet, in person, with the JIAC at least annually in conjunction with one of the quarterly meetings.

c. The Investment Advisor may be asked to participate in interim JIAC meetings if the JIAC determines that circumstances warrant or at the request of the Foundation Board.

4. Investing the Foundation’s Investment Funds in accordance with the

Foundation’s Investment Policy Statement Section VI and managing the ongoing allocation of these funds. The delegation of management and investment authority to Investment Advisors and Investment Managers is set forth below in Section V(B)(2).

V. Investment Objective and Considerations.

A. Objective. The funds under the purview of the JIAC, except those required for short-term needs, should be treated as long-term assets managed to maintain the purchasing power of those assets in the future while being mindful of the cash flow and liquidity requirements of the Foundation. Investment Funds should be invested in such a way as to help in meeting the future capital and other investment needs of the Foundation. The long-term objective is to achieve a rate of return, at an acceptable level of risk that also incorporates specifications as related to the Foundation’s Spending Policy outlined in Section V (B) below.

The Board does not expect that this investment objective will be achievable in every year and, as a result, will normally measure investment performance over rolling three- and five-year periods. The Board also recognizes that some level of investment risk, including volatility and illiquidity, is necessary to achieve the long-term investment objectives of the Foundation. In developing and implementing the Foundation’s investment program, the JIAC and the Foundation staff will consider the risks associated with each investment strategy and asset class.

The overall return will be evaluated against a policy portfolio benchmark consisting of the sum of different asset class benchmarks weighted in accordance with the long-term policy targets.

B. Spending Policy.

The Foundation seeks to achieve reasonable stability in budgeting for College operations while also maintaining intergenerational balance. In accordance with Accounting Standards Codification 958-205 (Endowments of Not-for-Profit Organization: Net Asset Classification of Funds Subject to an Enacted Version of the Uniform Prudent Management of Institutional Funds Act and Enhanced Disclosures for All Endowment Funds), the Foundation recognizes an amount equal to the historic dollar value of all donor-restricted endowment funds as permanently restricted net assets in the financial statements. The Foundation also recognizes, however, that subject to individual donor intent as expressed in a gift instrument, it may be appropriate to expend or accumulate so much of an endowment fund as it determines is prudent for the uses, benefits, purposes, and duration for which the fund is established.

In making its annual determinations to prudently appropriate or accumulate donor-restricted and other endowment funds, the Board will consider, if relevant, the following seven factors, as provided in the Maryland Uniform Prudent Management of Institutional Funds Act:

the duration and preservation of the fund;

the purposes of the Foundation, College and the endowment fund;

general economic conditions;

the possible effect of inflation and deflation;

the expected total return from income and the appreciation of investments;

the other resources of the Foundation and College; and the investment policies of the Foundation and College.

The spending rate will be decided by the Board annually and will be set within a range of 2-5% of each fund’s market value determined quarterly and averaged over a period of three years. Total investment earnings should be sufficient to cover investment management and other related endowment investment expenses. Should the earnings be insufficient to cover the established spending rate plus related expense, the Foundation Board can establish by Board vote a lower spending rate on an annual basis or decide using the UPMIFA standards cited above to appropriate funds to meet the established spending rate and/or current needs. The Board directs the Executive Director to establish and implement appropriate procedures and practices to administer the annual spending rate. Such procedures and practices shall be formally documented and reviewed with the Board.

The Board may also authorize up to a 2% annual service and administrative fee to be assessed to each endowment fund to reimburse the Foundation for it administrative services.

This administrative fee is in addition to the annual spending rate.

C. Legal Considerations. As part of its articulation of the investment strategy of the

Institution to fulfill its investment objective, the JIAC will, in accordance with law, consider the present and anticipated financial requirements of the Institution, the expected total returns on investments, the capital markets environment and general economic conditions. Specifically, the JIAC will comply with the following provisions of the Uniform Prudent Management of Institutional Funds Act and Maryland law.

1. Considerations in Managing and Investing the Portfolio. Section 15- 402(E) (2) of the Uniform Prudent Management of Institutional Funds Act sets forth specific factors that, if relevant, must be considered in managing and investing the Institution’s Investment Funds. These factors are:

a. General economic conditions;

b. The possible effect of inflation or deflation;

c. The expected tax consequences, if any, of investment decisions or strategies;

d. The role that each investment or course of action plays within the overall investment portfolio;

e. The expected total return from income and the appreciation of investments;

f. Other resources of the Institution;

g. The needs of the Institution and the portfolio to make distributions and preserve capital; and

h. An asset’s special relationship or special value, if any, to the purposes of the Institution.

The Institution may incur only those costs that are appropriate and reasonable in relation to its assets and purposes and the skills available to it, and must make a reasonable effort to verify facts relating to the management and investment of its Investment Funds.

The JIAC should contemporaneously document in its meeting minutes its consideration of each of the above factors it determines to be relevant to its decisions regarding managing and investing the Foundation’s Investment Funds.

2. Delegation of Management and Investment Functions. The JIAC, as delegated by the Foundation Board, may delegate to an external agent, including an Investment Advisor or Investment Manager, the management and investment of the Foundation’s Investment Funds to the extent such delegation is prudent under the circumstances. The JIAC must act in good faith, and with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, in:

a. Selecting an agent;

b. Establishing the scope and terms of the delegation, including the payment of compensation, consistent with the purposes of the Foundation and the Investment Funds; and

c. Monitoring the agent’s performance and compliance with the scope and terms of the delegation.

The JIAC, in making the decision as to whether to delegate such functions to a specific external agent, must request and review information regarding the external agent’s experience, personnel, track record and proposed compensation as compared to appropriate peers and conduct other customary due diligence as required.

The Foundation will take reasonable measures to assess the independence of the external agent. Any actual or potential conflicts of interest with respect to the proposed external agent possessed by a member of the Foundation Board or JIAC, or an officer or investment staff member, must be disclosed and resolved pursuant to the Foundation’s Conflict-of-Interest Policy regarding investments, set forth in Section XI below and in accordance with the Foundation’s Comprehensive Policies, Section I.A. dated February 14, 2012.

An external agent’s contract will not extend beyond a seven-year period. An RFP will be issued for such services at least every seven years to ensure that the best available services at competitive rates are attained.

D. Investment Managers.

1. General. Per Section V(C)(2) above, in situations whereby delegation has not been given to the Investment Advisor, the retention of each Investment Manager must be approved by the JIAC. The recommendation of a particular Investment Manager may come to the attention of the JIAC via an Investment Advisor, the investment staff, or in any other manner.

The Investment Managers may be granted full investment discretion regarding the purchase and sale of individual securities or investments within their investment style and consistent with the objectives and directions of the JIAC. Investment Managers are not permitted to deviate from their specifically announced investment strategies without the written approval of the JIAC. It is in the discretion of the JIAC whether to enter into a separate account relationship with a particular Investment Manager or to purchase an interest in a fund vehicle offered by the Investment Manager, based upon the offer of the Investment Manager and other applicable factors.

2. Specific Considerations. The following will be among the attributes to be considered by the JIAC and Investment Advisors in selecting and monitoring Investment Managers and Investment Funds:

a. Liquidity of the Investment Manager’s portfolio of underlying securities;

b. Industry exposure and diversification;

c. Portfolio volatility, and other measures of portfolio risk;

d. Use of borrowing and leverage;

e. Transparency of Investment Manager reporting;

f. Terms of investment, including fees and lock ups;

g. Operational considerations (e.g., custody, brokerage, proxy voting and securities lending); and

h. Potential conflicts of interest.

E. Volatility. Portfolio volatility and risk should be prudently managed in keeping with pertinent metrics that enhance the JIAC’s ability to evaluate risk exposure and manage risk.

VI. Asset Allocation.

A. Asset Allocations. The responsibility for establishing the strategic asset allocation policy (“Asset Allocation”) for the Foundation rests with the JIAC acting under the authority of the Foundation Board. In making asset allocation judgments, the JIAC recognizes that the Institution seeks to invest in a portfolio of assets that will potentially generate a return sufficient to meet the stated objectives.

With significant allocations to asset classes that have different risk and return characteristics, the Foundation maintains a highly diversified portfolio that is expected to generate competitive returns and reduce volatility over the long term. The Asset Allocation policy for the Investment Funds is shown in Exhibit A.

B. Reallocation. On a periodic basis, at least annually, the JIAC should informally determine whether the allocations need to be strategically re-allocated, and should review and assess the asset allocation targets. The JIAC will formally review the Asset Allocation during its annual review of this Investment Policy and will submit any changes to the Foundation Board for its approval.

VII. Asset Classes.

A. Global Equity Securities.

1. Permitted Global Equity Securities. The asset class may include, but is not limited to, common stock that is readily marketable on listed exchanges, convertible preferred stock, convertible debentures or other investments or vehicles that invest in or correlate with the performance of these securities. Stock rights or warrants received from existing equity holdings may be held or sold at the discretion of the Investment Manager.

2. Proxies. Investment Managers are to vote shareholders’ proxies. Such voting is to be solely in the best interest of the Investment Funds given their stated policies, goals, and objectives.

B. Global Fixed Income Securities.

1. Permitted Fixed Income Securities. This asset class may include, but is not limited to, U.S. Treasury obligations, U.S. government agency notes, U.S. corporate bonds, debentures, notes and preferred stock, commercial paper, U.S. and non-U.S. commercial bank certificates of deposit, semi-secured floating rate bonds, non-U.S. government bonds, non-U.S.

corporate bonds, mutual fund/co-mingled bond funds, yield enhancement techniques (e.g., options and futures) or other instruments or vehicles that invest in or correlate with the performance of these securities.

C. Cash or Cash Equivalents. Investment Managers may invest in short-term U.S.

Treasury obligations, government agency obligations, commercial bank CDs and other generally acceptable money market and equivalent instruments.

D. Alternative Investments.

1. Defined. Alternative Investments include (i) hedge funds, including, but not limited to, long/short funds, event-driven funds and fund-of-funds, (ii) private equity, (iii) venture capital, (iv) real assets (including, but not limited to, real estate, oil, gas and energy funds), (v) special situations and opportunistic investments, and (vi) similar strategies.

Among the factors to be considered in connection with Alternative Investments, liquidity, leverage and volatility will receive particular consideration.

2. Valuation. Alternative Investments should be valued in accordance with industry practice and accounting standards.

VIII. Investment Restrictions.

A. Diversification. In general, the JIAC should seek to ensure an appropriate diversification of the portfolio by asset class, sector, geographic region, and by Investment Manager. The JIAC will seek to ensure compliance with the following diversification guidelines unless the JIAC prudently determines that, because of special circumstances, the purposes of the

Investment Funds are better served without diversification. Any decision not to diversify will be reviewed at least annually.

1. Considerations. The JIAC should monitor compliance with the following considerations:

a. The percentage of total market value of each Investment Fund invested with a single Investment Manager should be limited to the extent necessary to ensure manager diversification.

b. Each Investment Fund investment with a single Investment Manager should be limited to the extent necessary to ensure manager diversification.

c. At least annually, the JIAC should review the investments of the Investment Funds to ensure compliance with the investment restrictions set forth in this policy.

B. Derivative Instruments. It is understood that Investment Managers, may invest in various derivative instruments only with the express approval of the JIAC. The JIAC, to the extent possible and practical, will monitor the Investment Funds’ exposure to derivative instruments.

C. Leverage. The Investment Funds may be invested with Investment Managers that employ leverage to enhance returns with appropriate risk exposure. The JIAC will monitor leverage exposure and related tax considerations.

D. The foregoing investment restrictions and limitations are intended as guidelines.

If the JIAC is notified or otherwise becomes aware that a limitation has been exceeded, then the JIAC will take steps that in its reasonable judgment are necessary to address the situation. For sake of clarity, the JIAC may decide not to take any action at that time.

E. It is understood that the Foundation must maintain a certain minimum level of liquidity that is sufficient to fund the programmatic activities of the Institution as well as to fund the ongoing expenses of the Foundation, including capital calls. The JIAC will establish guidelines for minimum liquidity available from the Investment Funds. The investment staff monitors on an ongoing basis the liquidity of the Investment Funds consistent with the parameters set forth by the JIAC.

IX. Performance Evaluation and Benchmarks.

The performance benchmarks for each asset class or subcategory are outlined in Exhibit A. The purpose of the objectives is to establish specific, clear, consistent, fair and rigorous parameters for regular and ongoing review. While performance is measured over both short- and long-term periods, the focus and emphasis of performance evaluation is on longer time periods, generally three- to five-year periods (once programs are fully developed) or a market cycle, whichever is greater. The JIAC and the investment staff will, with the assistance of the Investment Advisors, as applicable, monitor Investment Managers on an ongoing basis to ensure consistency of investment philosophy, implementation, organizational structure, and performance.

X. Communications and Reports from Investment Managers.

A. Due Diligence. Prior to investing with an Investment Manager, the Investment Advisor should obtain all relevant documentation, including:

1. Any offering memorandum or other document containing guidelines;

2. Limited partnership agreement or other governing documents;

3. Subscription documents;

4. Form ADV for advisers registered under the U.S. Investment Advisers Act of 1940, if available; and

5. Any due diligence materials deemed appropriate by the investment staff or the JIAC.

B. Reports. The Investment Advisor will be responsible for communications with Investment Managers and the receipt and evaluation of reports from the Investment Managers, except where the Investment Advisors directly supervise the Investment Managers, in which case the applicable Investment Advisor will be responsible for communications with supervised Investment Managers and receipt and evaluation of reports from these Investment Managers.

The Investment Advisor, as applicable, will report to the JIAC on such reports. The Investment Advisor, as applicable, will meet with the Investment Managers on a periodic basis, and at least annually. In addition, Investment Managers may be requested to meet with the JIAC.

1. Periodic Reports. Monthly or quarterly reports should include:

a. Performance;

b. Portfolio characteristics, summarized by key investment factors;

c. Portfolio holdings in total, where possible; and

d. Valuation.

e. Commentary on results, recent developments and such other topics deemed of interest and importance.

C. Price Changes. Investment Advisors should be prepared to explain any positions whose price or value varies significantly relative to their cost basis, and the potential impact on the net asset value of the Investment Funds.

D. Changes in Investment Strategies and Investment Professionals. Prior to any change in investment strategy by the Investment Managers, such change should be communicated to the Investment Advisors, who will report back to the JIAC. Except with regard to investments that have their own terms relating to changes in management (e.g., Alternative Investments), significant changes in investment professionals as well as portfolio management for the Investment Funds should be communicated to the investment staff and Investment Advisors, who will report back to the JIAC.

XI. Conflicts of Interest.

1. Policy with Respect to Conflicts of Interest. Certain investment relationships that members of the JIAC might have could present a potential or actual conflict of interest. This Section of the Investment Policy is intended to provide the JIAC with a policy and procedure for handling conflicts of interest. However, the Foundation’s By-Laws or Comprehensive Policies, as they address Conflicts of Interest, may supersede this section. This Section of the Investment Policy amends/modifies the Foundation’s Conflict-of-Interest Policy with respect to conflicts related to matters under consideration by the JIAC. Specifically, a conflict of interest could arise when: (i) a member of the JIAC has a material ownership interest in, or is directly employed by, a potential Investment Advisor or Investment Manager; (ii) a member of the JIAC is a client of a potential or existing Investment Advisor or Investment Manager (e.g., the JIAC member is also an investor with the Investment Manager); or (iii) a member of the Board or an officer who is not a member of the JIAC has a material ownership interest in, or is directly employed by, a potential Investment Advisor or Investment Manager. It is also acknowledged that the potential for conflicts of interest of JIAC members is considerably mitigated in situations where delegation of investment responsibility has been given to an Investment Advisor per Section V(C)(2) above whereby the Investment Advisor takes discretionary authority over Investment Manager selection and ongoing oversight. In these situations, it is accepted that JIAC members are effectively removed from the ability to influence or benefit from Investment Manager selections and are thereby not subject to Section XI (B) below.

2. Situations where delegation of investment responsibility has been given to Investment Advisors per Section V(C) (2) above. When the Investment Advisor has been delegated to manage the selection and oversight of specific Investment Managers, conflicts of interest concerns are mitigated to a point whereby members of the Board and JIAC members subject to Sections XI(A)(2) thru XI(A)(5) are not required to disclose those interests and are exempted from Section XI(B) below.

3. When a JIAC Member Owns a material interest in or is Employed by a Potential Investment Advisor or Investment Manager. It is the general policy of the Institution not to engage an Investment Advisor and not to invest with an Investment Manager if a member of the JIAC has a material ownership interest in, or is directly employed by, the Investment Advisor or Investment Manager. If an JIAC member has such a relationship, that relationship must be disclosed to the Chair of the JIAC in accordance with the procedures described below.

4. When an JIAC Member is a Client of a Potential Investment Advisor or Investment Manager. If an JIAC member knows that he or she has engaged a potential or existing Investment Advisor, or has an investment with a potential or existing Investment Manager, whether in the same fund as the Institution, a different fund, or in a separate investment account with the Investment Manager, such relationship or investment must be disclosed to the Chair pursuant to the procedures described below.

5. When a Board Member or Foundation Officer who is not an JIAC Member Owns or is Employed by a Potential Investment Advisor or Investment Manager. It will be the responsibility of the individual Board member(s) or Officer(s) to disclose any relationship wherein that member or Officer is a principal, holds a material ownership interest in, or is otherwise directly employed by an Investment Advisor or Investment Manager. If any such relationship exists, the member will disclose the interest to the Chair, who will consult with the Foundation Staff and Legal Counsel, as appropriate, to determine whether the relationship merits further consideration by the JIAC.

6. Household Family Members. The policy and procedures described in this Section XI also apply to household family members. For example, if a JIAC member knows that his or her household family member has an investment with an Investment Manager under consideration by the Institution, the JIAC member will disclose this information in accordance with the procedures described below.

B. Procedure for Disclosure and Recusal.

1. JIAC Members.

a. When an JIAC Member Owns or is Employed by an Investment Advisor or Investment Manager. If the JIAC is considering engaging an Investment Advisor or purchasing an investment with an Investment Manager, any JIAC member with a material ownership interest in, or who is directly employed by, that Investment Advisor or Investment Manager must disclose the interest or employment to the Chair. In consultation with Legal Counsel and Foundation Staff, as appropriate, the Chair will make a recommendation to the JIAC, which will determine whether the Investment Advisor should be disqualified from engagement by the Institution, or the Investment Manager should be disqualified from investment by the Institution.

b. When an JIAC Member is a Client of an Investment Advisor or Investment Manager. If the JIAC is considering engaging or continuing the engagement of an Investment Advisor, or is considering purchasing or redeeming an investment in a fund or with an Investment Manager, any JIAC member who is a client of such Investment Advisor or fund or Investment Manager (e.g., is also invested in the fund or otherwise with the Investment Manager) must disclose the interest to the Chair. In consultation with Legal Counsel and Foundation Staff, as appropriate, the Chair will make a recommendation to the JIAC, which will determine whether the member should be recused from the engagement or purchase or redemption decision. Whether it is advisable for the member to be recused will depend on the facts and circumstances.

The relevant inquiry will include, among other factors, whether the Institution’s decision to engage, invest, redeem, or take no action, could have an impact on the JIAC member’s relationship or investment in any material way.

2. If a member of JIAC is unsure whether his or her relationship with a potential or current Investment Advisor or investment with a potential or current Investment Manager merits disclosure, the JIAC member will err on the side of caution and disclose the relationship to the Chair. This policy is not intended to discourage JIAC members from bringing investment opportunities to the JIAC for consideration, but is meant to provide the JIAC and the Board with full transparency.

3. Staff. If the JIAC is considering engaging an Investment Advisor, or is considering an investment in a fund or with an Investment Manager, any Foundation Staff member who (i) has a material ownership interest in, or are directly employed by, a potential or existing Investment Advisor or Investment Manager; or (ii) are the client of a potential or existing Investment Advisor or Investment Manager, must disclose the interest to the Chair. In consultation with Legal Counsel, as appropriate, the Chair will determine whether the relationship merits further consideration by the JIAC. This policy also applies to household family members of the Foundation Staff. Foundation Staff (and their household family members) should not co-invest in the same investments in which the Foundation invests without prior approval of the Chair of the JIAC. This policy does not require a staff member to redeem investments held prior to the Foundation’s relationship with that fund or Investment Manager.

C. Annual Disclosure. On an annual basis, the Foundation Staff will provide the Board, officers, JIAC, and Investment Advisors with a list of current relationships and investments with Investment Advisors and Investment Managers in a form substantially similar to the form attached as Exhibit B. Each Board member, officer, JIAC member, staff member, and Investment Advisor should indicate on the form provided if, to the best of his or her knowledge, he, she and/or a member of his or her household family (i) has a material ownership interest in, or is directly employed by, an Investment Advisor engaged by the Foundation or an Investment Manager with which the Foundation invests, (ii) is a client of an Investment Advisor engaged by the Foundation, or (iii) has an investment in (a) any of the funds in which the Foundation is invested, or in any fund managed by the same Investment Managers, or (b) any separate investment account with any of the Investment Managers with which the Foundation invests.

D. Disclosure, Abstention and Recusal with Respect to Other Potential Conflicts of Interest. Other relationships that do not rise to the level of those covered in paragraphs (A) and (B), above, may still present a conflict of interest for a member of the JIAC if the member’s independent judgment regarding the Investment Advisor or Investment Manager could be impaired by virtue of the relationship. Potential conflicts of interest must be disclosed to the Chair of the JIAC, who will consult with the Foundation Staff and Legal Counsel, as appropriate, to determine whether the JIAC member must abstain or recuse himself or herself from consideration of the matter.

E. Recusal Process. If it is determined that abstention or recusal is required, then after disclosure of the potential conflict of interest and all material facts to the JIAC, and after the member responds to any questions that the JIAC may have, the member will be asked to abstain or be recused from the meeting while the appointment of the Investment Advisor or Investment Manager is discussed and voted upon. All such abstentions and recusals will be contemporaneously documented in the minutes of the JIAC meeting. While the member may not vote on the issue to which the potential conflict of interest relates, he or she may be counted in determining the presence of a quorum for purposes of the vote.

F. Indirect Relationships. For the sake of clarification and guidance, indirect financial or business relationships ordinarily will not rise to the level of a material conflict of interest. For example, a member of the JIAC who is an employee or otherwise affiliated with a brokerage firm or other third-party service provider with whom an Investment Advisor or Investment Manager does business ordinarily would not be considered to have conflict of interest. If a JIAC member is uncertain as to whether a business or familial relationship is so material as to give rise to a conflict of interest, the member is encouraged to disclose the relationship to the Chair.

XII. Confidentiality.

Members of the JIAC, Foundation staff and Investment Advisors involved with investments are expected to maintain the confidentiality of information obtained by virtue of their positions. Information obtained solely by virtue of one’s position on the JIAC, as a member of the Foundation Staff, or as an Investment Advisor (and not from other sources or relationships) is not to be used for personal financial purposes.

Privileged & Confidential

Exhibit A

Strategic Asset Allocation

As of August 28, 2017

Asset Class Long-Term Policy

Range Benchmark

Equity

U.S. Large Cap Equity 20 S&P 500

U.S. Mid Cap Equity 6 S&P MidCap 400 Index

U.S. Small Cap Equity 0 Russell 2000 Index

EAFE Equity 10 MSCI EAFE Index

Asia ex-Japan Equity 5 MSCI AC Asia ex Japan Index

Emerging Market Equity 3 MSCI Emerging Markets Equity Index

Total Equity 44 +/- 15

Alternative Investments

Hedge Funds 10 HFRI FOF Index

Private Investments 10 MSCI World Index

Real Estate & Infrastructure 6 S&P Global REITs, NAREIT Index, NCREIF Index

Hard Assets (e.g., commodities and commodity-linked investments)

3 Bloomberg Commodities Index

Total Alternative Investments 29 +/- 15

Fixed Income & Cash

Cash & Short Term 0 Bloomberg Barclays US T Bills 1-3 Month Index

U.S. Fixed Income 23 Bloomberg Barclays US Agg Index

Non –US Fixed Income 4 JPM Emerging Markets Bond Global Plus Index

Global Fixed Income 0 Bloomberg Barclays Global Agg Index Foreign Exchange & Non-USD Fixed Income

JPM Emerging Markets Bond Global Plus Index

Total Fixed Income & Cash 27 +/- 15

TOTAL 100.0%

Custom Benchmark: 44% MSCI AC World, 10% HFRI FOF Diversified, 3% Bloomberg Commodity, 27% Barclays US Aggregate, 6% S&P Global REITs, 10% MSCI World.

Annual Investment Conflict of Interest Disclosure Statement

FY2018

Name: _______________________________________________________________________

Title: Director, St. Mary’s College of Maryland Foundation Board_______________________

Except for the relationships and investments set forth below, I hereby certify to the best of my knowledge that neither I, nor any of my household family members, (i) has a material ownership interest in, or is directly employed by, any Investment Advisor engaged by the Foundation or any Investment Manager with which the Foundation invests, as named below, (ii) is a client of any Investment Advisor engaged by the Foundation, or (iii) has an investment in (a) any of the funds in which the Foundation is invested, as set forth below, or in any fund managed by the same Investment Managers named below, or (b) any separate investment account with any of the Investment Managers with which the Foundation invests, as named below.

Current Investment Managers and Advisors:

Funds: Please see attached listing

I hereby certify that I have received a copy of the Foundation’s current conflict-of-interest policy applicable to investments, have read and understand the policy, and agree to abide by it.

Signature: _________________________________________________________________

Print Name: _________________________________________________________________

Date: _________________________________________________________________

PLEASE LIST ANY EXCEPTIONS BELOW: