As stewards of excess capital and various endowed funds (i.e funds that have been committed/ donated for a long-term initiative) for BITSAA International, the BITSAA Investment Committee (BIC) aims to generate proceeds, via investment income and capital appreciation, primarily to fulfill the obligations towards these endowed initiatives. The BIC endeavors to achieve its objectives via appropriate investments within a combined investment portfolio called the BITSAA Endowment Fund (BEF).
The BIC team, led by Chief Investment Officer, Rajesh Chelapurath (’88) and supported by Koti Mylavarapu (’01), currently manages the BEF using a conservative value-based investment philosophy oriented towards long-term protection of principal and an emphasis on absolute rates of return. Keeping the liquidity needs of the various endowed initiatives in mind, the BEF is invested in an appropriate mix of globally diversified investment mix, comprising best of breed mutual funds and ETFs.
BEF: Background and History
- Purpose: The BEF came into existence in April 2003 to manage BITSAA‘s endowed initiatives and its excess capital. The BEF currently manages 8 endowments as detailed in the attached IPS. All non-endowed contributions are managed/ administered through BITSAA‘s Operational Account.
- Investment Philosophy: Given the nature of the BEF and its obligations, the emphasis is on absolute rates of return while protecting downside.
- Investments: BIC currently manages the BEF via the use of appropriate investment instruments (best of breed mutual funds/ ETFs/ money managers) that enable the assets to be invested in a global, diversified, and low cost manner.
- Disbursements: From the BEF are typically made on an annual basis with BITS Pilani helping to distribute the proceeds to appropriate beneficiaries in a timely manner. The annual level of disbursements currently are to the tune of approx. $7,000 p.a. This level varies as a function of the tuition fees and the Rs/ USD exchange rates.
BEF Assets: BEF had an inception value of $10,000 in April 2003 and has grown over time (via a combination of investment returns and net of contributions/disbursements) to approx. $133,906 (excluding cash meant for the BITSAA Operations Account) as of December 31, 2014.
- In the year 2014, the BEF, which has investments allocated in similar amounts into equities and fixed income, generated a return of +3.4%, for an unrealized capital appreciation of $4,564 during the year. The returns were weighed down to some degree by the cash levels sitting in the account (meant for BITSAA Operations and initiative disbursements).
- The BEF has had a reasonable last 5 years--with average returns of 6.3% p.a. ending calendar year 12/31/14.
- During the year, the rupee depreciated marginally from 61.9/ USD on Dec 31, 2013 to 63.2/USD on Dec 31, 2014. The academic year 2014-2015 saw an increase in tuition to the tune of +14% (from Rs. 1.57 Lakhs p.a. to Rs. 1.79 Lakhs p.a.), a significant rise in USD terms for our obligations tied to tuition fees. We remain in decent shape to weather such storms in the form of USD depreciation or tuition increases or a below expected performance in any given year.
Inflows/Outflows: There were no contributions for any endowments into the BEF in 2014 or YTD March 2015. There were security contributions that came into the BEF as part of the Annual Fundraising drive and these assets (to the tune of $15,621) will be transferred into the BITSAA Operations account.
The Investment Policy Statement (IPS) dictates the policies and standards that govern the management of the BEF. This document (please see the latest version below) also captures all aspects of the operations of the BIC and the BEF and is updated/published at least once a year.
BEF: Growth of Assets (Uptil 2013)
The list of endowed initiatives that the BEF currently supports (as of December 31st, 2010) is as follows:
List of Endowed Initiatives
List of Endowed Initiatives: Managed by BITS, Administered by BITSAA
Class of 1966-’71 Scholarship Initiatives
Rs. 20,000 MCN scholarship per semester for a female student
4 APOGEE awards each worth Rs. 10,000 for BITS students
6 grants(2 worth Rs. 10,000 for postgraduate and 4 worth Rs.5,000 for undergraduate students) for publishing papers in reputed journals
For more information, please contact: Rajesh Chelapurath (‘88), Chief Investment Officer & Trustee (firstname.lastname@example.org), or Koti Mylavarapu (‘01), Director, BIC (email@example.com). The following documents also discuss the history, guidelines, policies, and operations of the BIC and the BEF in more detail.
BITSAA Investment Committee—Overview and Status Report, version December 31st, 2010
Investment Policy Statement-Executive Summary, version December 31st, 2011
Investment Policy Statement, version February 17, 2012
Investment Policy Statement, version September 11, 2012
Investment Policy Statement, version March 31, 2013
Investment Policy Statement, version December 31, 2013
Investment Policy Statement, version December 31, 2014 (MOST CURRENT)