The Board of Trustees Intermediate Pool Authorization and Investment Policy, adopted on October 18, 2016, sets forth guidelines for investments and withdrawals into and out of the intermediate pool (IP). Specific procedures consistent with this policy are established by Financial Management Services (FMS) and Stanford Management Company (SMC). These procedures cover not only investment policies but also extend to the operating policies, such as valuation and computation of the per-share market value established for the IP.
The IP is being offered as an attractive investment alternative to the merged pool (MP) for university capital that requires liquidity. The IP is designed for investors able to take principal risk in pursuit of higher returns, but may also require liquidity from time to time. Investors with an intermediate term investment horizon should consider this investment pool. Investors with time horizons more than seven years that are able to accept illiquidity should consider investing in the MP, which has a somewhat higher expected rate of return. Investors with a very short-term time horizon should be cautious of taking principal risk associated with either the IP or MP. Unlike funds within the expendable funds pool (EFP), no guarantee of principal exists for the IP or MP.
The IP functions as a unitized pool with shares and share prices, similar to the MP. All funds receive the return of the portfolio, less the cost to administer the portfolio. Funds invested in the IP do not receive payout and are not considered part of the university's endowment.
The IP is open to the following types of shareholders:
- New pending funds not intended for endowment
- New donor advised funds (DAFs), or portions of DAFs, not intended for Stanford’s endowment
- New additions to the Land Development Fund (LDF)
- Hospital investments
- School and department funds (SDF) (e.g., The Stanford Business School Trust, Stanford Engineering Venture Fund, DAPER Investment Fund)
- A portion of the EFP at the discretion of the chief financial officer (CFO)
- Intermediate term reserves from school and units, which might otherwise have been invested in the MP as funds functioning as endowment (FFE)
- School and unit reserves: Requests to invest in the IP made by a school or academic department must be approved by both the dean or chair and the school’s senior financial officer.
- Auxiliary units: Such requests must be approved by a university vice provost or vice president.
- Administrative units: Such requests must be approved by the provost.
- Pending funds invested in the IP require an initial investment amount of at least $500,000. Exceptions to this policy must be approved by the vice president for development.
- All other investments in the IP, including both initial investments and subsequent additions, must be in increments of at least $1 million to ensure administrative costs remain low and do not unduly impair investment returns. Any exception must be approved by the university's CFO.
School and unit reserves invested in the IP are subject to a four-year lockup period, during which the school or unit may not withdraw from the fund.
The intermediate pool investment and withdrawal request form must be completed, approved, and sent to Fund Accounting.
Questions regarding investments or withdrawals into or out of the IP should be referred to Fund Accounting.
