SM: Semi-Monthly M: Monthly Q: Quarterly V: Varies No t e s t o Co n s o l i d a t e d F i n a n c i a l S t a t eme n t s J u n e 3 0 , 2 0 2 2 a n d 2 0 2 1 Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value (in thousands): 2022 2021 Beginning balance $ 293 $ 257 Net unrealized (loss) gain (59) 36 Ending balance $ 234 $ 293 All net unrealized gains or losses in the above table are reflected in the Consolidated Statements of Activities. Net unrealized gains or losses are determined based on changes in fair value of the instrument related to future expected cash flow associated with investments. The fair value of certain alternative investments represents the ownership interest in the net asset value (NAV) of the respective funds. The fair values of the investments held by funds that do not have readily determinable fair values are determined by each fund’s investment manager and are based on appraisals or other estimates that require varying degrees of judgment. If no public market exists for the investments, the fair value is determined by the investment manager taking into consideration, among other things, the cost of the investment, prices of recent significant placements of similar investments of the same issuer, and subsequent developments concerning the companies to which the investments relate. The university has performed due diligence regarding these investments and believes that the NAV of its alternative investments is a reasonable estimate of fair value as of June 30, 2022 and 2021. The following table presents additional information pertaining to alternative investments as of June 30, 2022 (in thousands), the fair values of which have been estimated using the NAV of the investment funds: Designated and Restricted Investments¹ Other Investments Total Fair Value Unfunded Commitments Redemption Frequency (Subject to Restrictions Noted) Redemption Notice in Days Commingled Funds: Debt securities² $ 7,036 $ 4,743 $ 11,779 $ - SM–M 5–30 Hedge funds³ 10,415 - 10,415 - M–Q 30–60 4,930 9,135 14,065 - M–Q (Expiring Locks)⁴ 30–45 4,350 4,750 9,100 - V (Rolling Locks)⁵ 120 6,829 - 6,829 - Q (Gate Restrictions)⁶ 60–75 Subtotal 33,560 18,628 52,188 - Private capital: Private equity 5,915 - 5,915 13,206 Illiquid⁷ N/A Private real estate 1,722 - 1,722 2,349 Illiquid⁷ N/A Subtotal 7,637 - 7,637 15,555 $ 41,197 $ 18,628 $ 59,825 $ 15,555 ¹ Amounts include alternative investments of the Foundation, as defined and described in Note 13. ² This category primarily includes credit instruments, including fixed income bonds, sovereign bonds from Organization for Economic Cooperation and Development (OECD) countries, senior secured floating rate bank loans, high-yield (non-investment grade) bonds, and European loans. ³ This category includes investments that may pursue alternative strategies to diversify risks, reduce volatility, and enhance returns. ⁴ These investments are subject to lock-up provisions with up to one year remaining as of June 30, 2022. 30
RkJQdWJsaXNoZXIy NDE4MDg=