The survey also highlighted that higher education executives have a lack of confidence in the U.S. economy overall, with just one quarter saying they are very optimistic, while 51% are neutral.Going Green to Save GreenReduced energy costs are one way college and university executives are looking to trim operating expenses (64%). Other areas of prospective cost savings include:Reducing vendor relationships and procurement costs (50%)Freezing or reducing compensation for faculty and staff (49%)Freezing most or all capital projects (42%)Reducing administrative staff (25%)Reducing or eliminating some academic programs (25%)Reducing student services and financial aid (15%) Despite seeking ways to save, investing in on-campus “green” power or environmental sustainability projects (25%) is a key area where institutions are looking to increase capital expenditures, with over three quarters of respondents (77%) expecting to increase spending on these projects over the next five years.Projects in Need of FinancingExecutives have a long list of projects they’re seeking to finance over the next 12 months, including:Renovating existing campus infrastructure and facilities (63%)Expanding or creating new academic programs (50%)Investing in IT and equipment (48%)Investments in heavy equipment, office/lab equipment or furniture (16%) In addition to “going green,” executives expect capital campaign fundraising and private gifts will yield the greatest potential for expansion projects (51%), followed by tuition revenue (26%), bond financing (7%), bank or institutional financing (5%) and endowment investment (2%).About TD Bank’s SurveyTD Bank polled financial decision makers and influencers at four-year private colleges and universities in the U.S. to understand their main financial concerns when considering campus investments over the next 12 months. The survey was conducted by ORC International, an Infogroup company, in April and May 2011. Overall results for n=100 can be interpreted with an error margin of +/- 9.75 at a 95% confidence level. CHERRY HILL, N.J. and PORTLAND, Maine, July 12, 2011 /PRNewswire/ — TD Bank,According to a recent survey by TD Bank, college and university financial decision-makers across the country cite reduced tuition and declining fee revenue as major causes for concern and are increasingly considering “going green” to save on operating expenses, while ramping up information technology (IT) spending and investments in updating campus infrastructure.TD Bank’s survey of chief financial officers, accounting officers, comptrollers and other financial managers at private, not-for-profit colleges and universities across the US found that nearly three out of four (72%) respondents view reduced net tuition and fee revenue as their biggest financial concern, even as they deal with decreasing private gift income (59%).Despite these concerns, spending is expected to increase in many areas over the next 12 months, with 77% expecting to invest in on-campus “green” power or environmental sustainability projects over the next five years.Financial ConcernsRespondents also report concern about cash flow management (39%), reduced endowment market value (31%), weakened balance sheets (22%) and access to credit (19%). As the stock market has bounced back from its lows in the fall of 2008, concern about loss of endowment market value has been cut in half, from 68% over the past three years to just 31% today.The financial management practices that college and university financial decision-makers expect to focus on in the coming year include: Reduced private gifts income (68%)Reduced net tuition and fee revenue (61%)Weakened balance sheets (48%)Cash flow management (48%)Access to credit (39%)Reduced endowment market value (36%)
Romania’s Financial Supervisory Authority (ASF) has finally launched a public consultation recommending changes in second and third pillar pension fund investments and asset valuation.The proposals, which have long been the subject of discussion with the Romanian Pension Funds’ Association (APAPR), include allowing pension funds to invest in municipal and corporate bonds outside of regulated markets, provided they are reflected in the fund managers’ risk management policy, including counterparty criteria, pricing and liquidity.The transactions would restricted to instruments where the relevant regulated market was illiquid, and have to be approved on a case-by-case basis by the ASF.The ASF’s proposals would also ease the asset risk weighting of certain non-investment grade asset categories from 0% to 25%, including holdings in Romanian leu, freely convertible currency accounts and deposits, and treasury bills and government securities issued by EU and EEA member states. The weighting on investment-grade corporate bonds would rise from 50% to 75%, and that on non-EU or EEA government securities traded on regulated Romanian, EU or EEA markets from 50% to 100%.Mihai Bobocea, adviser to the APAPR, told IPE that the change in these risk weightings would free up portfolios to increase their equity investment.“The new regulation favours a little bit more allocation into all other instruments rather than government bonds. Also, it slightly reduces the previously exaggerated risk-valuation gap between ‘investment grade’ and ‘non-investment grade’ instruments,” he said. “However, we do not expect these changes to significantly affect other allocations other than a slight increase in the share of equity in pension fund portfolios. Currently, the average is at about 20% of all assets, but we do not expect it to go as high up as 25% for example, even under the new, more relaxed, regulations by the AFS.”Bobocea added that other regulations, such as the relative guarantee return benchmark, would maintain an investment herding instinct.The ASF has also proposed a significant change in interest-rate hedging, currently restricted to instruments traded on regulated markets, but only for third-pillar funds.Where the regulated market is insufficiently liquid to allow such contracts to be initiated or unwound at any time, the funds will be able to use over-the-counter (OTC) derivatives such as forwards and swaps.As in the current legislation, such hedges would be confined to assets with a minimum five years’ residual maturity from the date of the transaction.The proposals specify that such OTC derivatives must be valued daily, and be able to be – at the fund manager’s initiative – sold, liquidated or closed at any time at their fair value, and with the original counterparty.The size of all derivatives contracts must not exceed the repayable principal sum of the underlying assets hedged. Fund managers would also be obliged to use the International Swap Dealers Association’s master agreements adjusted to Romanian legislation.The use of additional interest rate hedging tools would prove valuable for third pillar funds: as of the end of April 73% of their aggregated portfolio was invested in bonds.Bobocea said he was disappointed that the second pillar would not be able to benefit.