51-8-202 - Standards for managing and investing an institutional fund. - Utah Statutes

51-8-202. Standards for managing and investing an institutional fund.
(1) In managing and investing an institutional fund, an institution:
(a) may incur only costs that are appropriate and reasonable in relation to the assets, thepurposes of the institution, and the skills available to the institution; and
(b) shall make a reasonable effort to verify facts relevant to the management andinvestment of the fund.
(2) An institution may pool two or more institutional funds for purposes of managementand investment.
(3) Except as otherwise provided by a gift instrument, the following rules apply:
(a) In managing and investing an institutional fund, the following factors, if relevant,must be considered:
(i) general economic conditions;
(ii) the possible effect of inflation or deflation;
(iii) the expected tax consequences, if any, of investment decisions or strategies;
(iv) the role that each investment or course of action plays within the overall investmentportfolio of the fund;
(v) the expected total return from income and the appreciation of investments;
(vi) other resources of the institution;
(vii) the needs of the institution and the fund to make distributions and to preservecapital; and
(viii) an asset's special relationship or special value, if any, to the charitable purposes ofthe institution.
(b) Management and investment decisions about an individual asset must be made not inisolation but rather in the context of the institutional fund's portfolio of investments as a wholeand as a part of an overall investment strategy having risk and return objectives reasonably suitedto the fund and to the institution.
(c) Except as otherwise provided by law other than this chapter, an institution may investin any kind of property or type of investment consistent with the standards of this section.
(d) An institution shall diversify the investments of an institutional fund unless theinstitution reasonably determines that, because of special circumstances, the purposes of the fundare better served without diversification.
(e) Within a reasonable time after receiving property, an institution shall make andimplement decisions concerning the retention or disposition of the property or to rebalance aportfolio, in order to bring the institutional fund into compliance with the purposes, terms,distribution requirements, and other circumstances of the institution and the requirements of thischapter.
(f) A person who has special skills or expertise, or is selected in reliance upon theperson's representation that the person has special skills or expertise, has a duty to use thosespecial skills or that expertise in managing and investing institutional funds.

Enacted by Chapter 59, 2007 General Session