Here is the University of Virginia’s explanation of where the infamous $2.3 billion “Strategic Investment Fund” came from:
The reserves have been accumulated through sound financial management from the following sources:
– In June 2009, the University held approximately $620 million in unrestricted funds and related earnings that had accumulated in its history and were invested with the University of Virginia Investment Management Company, or UVIMCO;
– The University’s operating reserves of approximately $385 million for the Academic and Health System divisions, principally set aside since 2009 for working capital, future capital needs for major maintenance, requirements of its self-insured health plan and other operating needs, which also were invested with UVIMCO;
– Since 2009, investment earnings realized on University operating funds held at UVIMCO were approximately $700 million, a result of robust average annual returns.
– In November 2015, the Board of Visitors approved a new liquidity policy permitting the establishment of bank operating lines of credit that enabled UVA to transfer approximately $480 million of operating cash for investment with UVIMCO in early 2016. This action was taken in consultation with major ratings agencies to preserve the University’s AAA ratings.