Assignment # 1

Group members:
Ahsan Mubeen

L1S13BBAM2105

Farhan Iqbal

L1S13BBAM0059

Omer Ali

L1S13BBAM0107

Mohsin Abbas

L1S13BBAM0103

SUBJECT: INVESTMENT ANALYSIS AND PORTFOLIO

SUBMITTED TO: PROF. USMAN YUSUF
DATE: 3RD APRIL 2016
CASE STUDY ASSIGNMENT

UVIMCO is shifted itself to active in 10090 as far as endowment investment are concerns. Other
than US they are stared to go in Asia, Thailand and Europe for the high return because they are
developing countries and return rates are always more in developing countries instead of
developed countries like USA. They are also using low correlation with US equity market for
diversification.
Over the last 20 years UVIMCO earned more than 13% till 2003 it was the highest after Harvard
endowment.
As bond are divided into two categorize low default risk and high default risk. Long term bond
has high return whereas short term bond has low return. Long term bond is also very difficult to
sell. Equity investments are more liquid.
Hedge bond are not very liquid because of their term period that is 3 to 5 years and they also
require at least $1 million to invest
Private equity includes issuing debt bonds and buying shares of other public companies making
them private and then improving them through restructuring and increasing the cash flow, this is
also intended for 3 to 5 years time period
Venture capital has very low probability of success and it also have a time period of 3 to 5 years.
Venture capitals is the capital that provide investment for the startup.
Other assets class includes real estates and commodities which contain large potential for return
and also the low correlation with equities

Endowment size:
The Return of hedge funds, private equity, and venture capital markedly surpasses as compared
to returns by equities and fixed income investments. Thats why big endowment practice high
return because they are keen to take more risk and whenever there is a high risk and its mean
return will be higher with easy requirements. Here large endowment experiences more return
with respect to small endowment in different years

Decision:
UVIMCO exceeded the set bench mark by 1% equity managers of both public and private
equities perform well but hedge mangers didnt performed well compared with other
endowments. UVIMCO got return of almost 16% .Its investment is high in hedge funds and low
in equities. Apart from these one, two negatives the recommendation should be in favor of
investing with UVIMCO as it is one of the biggest endowment fund and large endowments
consistently enjoy high rates of return. Apart from these one, two negatives the recommendation
should be in favor of investing with UVIMCO as it is one of the biggest endowment fund and large
endowments consistently enjoy high rates of return.