Investment Strategy

The Vilnius University Foundation started investing in different asset categories in 2019 and currently manages the investment portfolio of over 2.2 million Euros. The Investment Board, which is appointed by the shareholders of the Foundation, is responsible for the successful investment and the development of the investment strategy.

Financial Management Guidelines – in Line with the Best International Practice

Long-term investment objectives = Preservation and growth of the endowment capital fund value + Stable support to Vilnius University

Investment Objectives:

  • To seek a long-term growth of the endowment capital fund value by actively investing in diversified financial instruments.
  • The minimum target net return over the medium term must exceed the consumer price inflation of the Euro Zone.
  • The target return is based on the current structure of the investment portfolio and the relevant benchmark indices.

Investment Philosophy

  • An unlimited term
  • A long-term investment strategy
  • An opportunity to take risks in stock markets and less liquid investments.

The return on investment is directly proportional to the risk taken. Investing is the management of various risks rather than the management of returns. Risk diversification is an important part of the investment strategy.

Investment Strategy

Investments are made in different asset categories.

  • In the global market and are not limited to securities distributed in Lithuania. Foreign investment is mainly focused on developed markets with strong economies, low political risk and high corporate governance standards.
  • The maximum investment in one investment object is 20% of the endowment capital fund value (restriction does not apply to deposits).
  • The base currency is Euro, but investments are also possible in other currencies. Share of investments in foreign currency should not exceed 50% of the endowment capital fund value.
  • Efficient management of entrusted assets by optimizing investment, storage and management costs.

Diversified Allocation of the Investments of the Endowment Capital

Asset Class

Longterm Asset Breakdown

Breakdown Limit Min.

Breakdown Limit Max.

Benchmark

European Shares

25%

15%

30% Stoxx Europe 50, EUR

World Stocks

20% 10% 30% MSCI World, EUR

Emerging Market Equities

5% 0% 10% MSCI Emerging Markets, EUR

Euro Zone Government Bonds

25% 10% 40% Bloomberg Barclays Euro Treasury Bond Index

Corporate Bonds

10% 10% 30% Bloomberg Barclays Euro Corporate Bond Index

High Yield Bonds

5% 0% 10% Markit iBoxx Euro Liquid High Yield Index

Alternative Investments

10% 0% 35% EURIBOR 6M + 3%

Money Market Instruments

0% 0% 10% EURIBOR 6M

As the endowment capital fund grows, investment management will intensify and the level of risk-taking will gradually increase in line with the international practice.

In order to achieve an investment return and contribute to the development of the VU community opportunities, the future alternative investments may be directed to the VU-related objects, such as:

  • start-ups or young businesses that have been developed by the VU community and have high added value potential;
  • infrastructure projects that improve the academic process (e.g. student dormitories);
  • other projects.