Chief Investment Officer Overview

Fiscal Year 2013

Jonathan D. Hook, Vice President and Chief Investment Officer

Jonathan D. Hook, Vice President and Chief Investment Officer

We are pleased with how the Long Term Investment Pool performed over the fiscal year ended June 30, 2013. The portfolio net investment return was 11.63% in fiscal year 2013 versus the policy return of 8.96%.

During the fiscal year we faced rising interest rates and mass investor repositioning in anticipation of Federal Reserve policy changes. Public equities, hedge funds, and private equity were all strong performers during the year. Natural resources, infrastructure and fixed income lagged due to softness in global energy prices for most of the year and rising rates in the bond markets. Highlights for the fiscal year included:

  • Our global long equity allocation outperformed the MSCI All Country World Index across all time periods. Since inception of the Investment Office, the long equity book has outperformed the index by 220 basis points with less volatility.
  • Our long/short equity portfolio performed well over the year as markets turned to focus on fundamentals. The portfolio has consistently outperformed the long/short equity market benchmark across all time periods and with less volatility since the inception of the office.
  • While emerging markets equities were weak throughout the year and underperformed developed international equity markets, our emerging markets allocation managed to outperform the emerging market index.
  • Our credit and multi-strategy managers were consistently strong over the course of the year. As a group, they provided positive returns month after month and contributed a double-digit return as a group by year-end.
  • Our private equity portfolio, which we have been building piece by piece since the inception of the investment office, really began to bear fruit in FY 2013. The portfolio returned a high double-digit return that beat its benchmark return target by over 350 basis points.

We continue to evaluate diversifying strategies to position the portfolio for anticipated lower fixed income returns and the continuing uneven recovery of global markets. We also continue to “highgrade” our portfolio of investment managers with whom we work.

We are truly grateful to our donors for their generous support to Ohio State. We will continue to strive for the best possible risk-adjusted investment returns and grow the purchasing power of the Long Term Investment Pool. This will ensure that the sustainability of our capital continues onward and the recipients of the individual endowments will receive distributions to carry out donor’s wishes in perpetuity.

REASONS TO SAY “THANK YOU!”

The But for Ohio State campaign is a $2.5 billion fundraising endeavor that invites those who believe in Ohio State to invest in our students, our faculty, and our potential.

*Gifts through June 30, 2014

“I USE WHAT I LEARNED AT OHIO STATE EVERY DAY.”

—Patty Tambling Lutz ’69