UC Investments Committee reviews second-quarter results; CIO recommends higher equity exposure and flags tariffs, inflation risks

Jagdeep Singh, Chief Investment Officer for the University of California, briefed the Investments Committee on March 14 on fiscal-year-to-date performance, liquidity needs for campuses and hospitals, and strategic positioning amid geopolitical and policy uncertainty.

Singh told Regents the system’s assets under management were approximately $184 billion at the start of the fiscal year and that pools had fluctuated; he updated figures to market data as of March 14 during the presentation. He said working-capital pools (short-term and total-return) supported campus liquidity, noting the short-term investment pool was roughly $1.3 billion as of January 31 and the total-return pool about $9.4 billion; Singh said short-term liquidity was likely closer to $2 billion at the time of the meeting.

Singh said public equities comprised about 61.7% of the portfolio, fixed income about 16.6% and private assets about 20.6%, with cash near 1.1%. He said equities were designed to generate long-term returns while fixed income provided current income; fiscal-year-to-date returns for some pools ranged from low single digits to mid-single digits. Singh advocated maintaining equity exposure and proposed reallocating the system’s shrinking “absolute return” allocation into public equities: moving the pension absolute-return share (about 3.5%) into public equities and increasing the endowment’s public-equity allocation from about 40% to roughly 50%.

Guest economist Torsten Slock (chief economist, Apollo) joined by video to discuss tariffs and global growth. He told Regents that tariffs and supply disruptions could add upward pressure on inflation and that higher-for-longer interest-rate expectations were reflected in markets. Singh and other investment officers said markets were pricing only limited Federal Reserve cuts this year and that tariffs could raise prices for imported goods, including housing inputs and automobiles. They emphasized the team’s view that growth and investment opportunities were increasingly global, not solely U.S.-centric, and highlighted data centers, AI-related infrastructure and selective growth sectors as areas of interest.

Regents asked detailed questions about sector and geographic weightings, funding-ratio implications and whether the investment office planned more active sector exposure. Singh said active single-stock picking is difficult at the UC scale but that the investment team had placed targeted allocations into growth areas and data centers. No formal committee vote on asset-allocation changes occurred at the meeting; Singh said he would present a formal action proposal at a future committee meeting.