Key Highlights

• Established in 2012 by the Investment Committee that consists of experienced investment professionals and members of the UWC General Committee
• The Committee sets investment objectives and hires outside professional investment manager(s) to achieve them
• Primary objective is to preserve capital, provide a dependable and reasonable rate of long-term investment return, and to maximize income within a framework of moderate risk assumption
• Endowment started in August 2012 with HK$2.2 million
• In the six years since then, it has already funded a total of HK$500,000 in scholarships to UWC students
• It ended with a balance of HK$2.4 million as of end of December 2017
• This is comparable to investing $1000, which produces $42 interest income annually, and at the end of 6^th year still holding a principal of $1100!

Background

 

The UWC Hong Kong Endowment (‘The Endowment’) was established in 2012 by The Investment Committee (‘The Committee’) that consists of experienced professionals in the investment industry and members of the UWC General Committee (‘The GO’). The Committee focuses on the process and governance of the Endowment comprised of money raised from ex-students in the 1990s.

 

The Committee sets investment objectives and goals, and hires competent outside investment manager(s) to achieve them. The Committee oversees the investment allocation of the Endowment, but does not make specific investment decision. The Committee monitors the Investment Manager's compliance with the objectives, and reviews investment results. Lastly, the Committee informs the UWC GO annually of the results of the Endowment.

 

The primary objective of the Endowment is to preserve capital, provide a dependable and reasonable rate of long-term investment return, and to maximize income within a framework of moderate risk assumption. Secondary objectives are capital appreciation and growth of income to maintain purchasing power. The Endowment’s principal is invested and protected, whilst only a portion of the investment gains and dividend income is used to fund scholarships.  The rest is directed back into the fund as ‘surplus’ which can be used in a future date. As a result, the endowment grows over time and becomes a perpetual source of funding.

 

A Reserve Account is set up for excess return to be kept in cash, in years when the capital appreciation exceeds required drawdowns. The recommended surplus in the reserve account is no more than 2 years of expected drawdowns, beyond which the Investment Committee will consider a re-investment of the surplus.