New commitments will be made to illiquid/private capital investments with the intent to keep current market value of liquid holdings above 35% of the total fund. Illiquid percentages will be calculated based on current market value. The administration, assisted by the Investment Management Firm, will complete annual forecasting and make appropriate commitments to reach and maintain the approved policy allocation and liquidity while ensuring diversification across vintage year, strategy, geography, etc.

It is recognized that significant changes in investment market values could cause the portfolio to be positioned outside of these guidelines. If this occurs, staff will communicate this to the Board or its designated Committee and develop a plan to reposition the portfolio consistent with these guidelines over a reasonable time frame.

Proxy Voting

The Board delegates full authority for proxy voting to the administration for the securities under their discretionary authority and requires the investment managers to vote all proxies in the best interest of the Endowment with input from the administration. In addition, when requested, the administration will report to the Board regarding their proxy-voting policies and activities behalf of the Endowment.

Transaction Costs

The Board requires the Investment Management Firm, in their capacity as fiduciaries, to manage the transactions costs they incur on the Endowment's behalf in the best interests of KSU. When requested, the firm will report to the Board or its designated Committee regarding the transaction costs incurred and the brokers used on the Endowment's behalf.

PERFORMANCE EVALUATION:

Endowment performance will be monitored and reviewed over short and long-term time periods, with an emphasis on longer-term periods in order to include full market cycles and reflect the Endowment's long-term investment strategy. Performance will be evaluated at two levels: total Endowment and asset class. The levels will include a market index and peer group measurement review. Performance will be reviewed on a gross and net return basis and will include risk metrics and risk-adjusted returns.

Performance Benchmarks

The total Endowment performance will be measured against the following:

• The primary performance objective of achieving a long-term total return, net of fees and expenses, of at least 7.5%. It is expected that portfolio performance will vary significantly from this benchmark over shorter periods. Therefore, performance compared to this benchmark will be evaluated only over longer periods such as five to ten years.
• From time to time the performance of the KSU's Endowment should be compared to a peer group of similar institutions.
• The Policy Benchmark will be rebalanced to target weightings on December 31st of each calendar year.