                                 CODE OF VIRGINIA

STANDARD OF CONDUCT IN MANAGING AND INVESTING INSTITUTIONAL FUND (§ 64.2-1101)

A. Subject to the intent of a donor expressed in a gift instrument, an
institution, in managing and investing an institutional fund, shall consider the
charitable purposes of the institution and the purposes of the institutional
fund.

B. In addition to complying with the duty of loyalty imposed by law other than
this chapter, each person responsible for managing and investing an
institutional fund shall manage and invest the fund in good faith and with the
care an ordinarily prudent person in a like position would exercise under
similar circumstances.

C. In managing and investing an institutional fund, an institution:

   1. May incur only costs that are appropriate and reasonable in relation to the
   assets, the purposes of the institution, and the skills available to the
   institution; and

   2. Shall make a reasonable effort to verify facts relevant to the management
   and investment of the fund.

D. An institution may pool two or more institutional funds for purposes of
management and investment.

E. Except as otherwise provided by a gift instrument, the following rules apply:

   1. In managing and investing an institutional fund, the following factors, if
   relevant, shall be considered:
   				a. General economic conditions;
   				b. The possible effect of inflation or deflation;
   				c. The expected tax consequences, if any, of investment decisions or
   strategies;
   				d. The role that each investment or course of action plays within the
   overall investment portfolio of the fund;
   				e. The expected total return from income and the appreciation of
   investments;
   				f. Other resources of the institution;
   				g. The needs of the institution and the fund to make distributions and to
   preserve capital; and
   				h. An asset&#8217;s special relationship or special value, if any, to the
   charitable purposes of the institution.

   2. Management and investment decisions about an individual asset shall be made
   not in isolation but rather in the context of the institutional fund&#8217;s
   portfolio of investments as a whole and as a part of an overall investment
   strategy having risk and return objectives reasonably suited to the fund and
   to the institution.

   3. Except as otherwise provided by law other than this chapter, an institution
   may invest in any kind of property or type of investment consistent with this
   section.

   4. An institution shall diversify the investments of an institutional fund
   unless the institution reasonably determines that, because of special
   circumstances, the purposes of the fund are better served without
   diversification.

   5. Within a reasonable time after receiving property, an institution shall
   make and carry out decisions concerning the retention or disposition of the
   property or to rebalance a portfolio, in order to bring the institutional fund
   into compliance with the purposes, terms, and distribution requirements of the
   institution as necessary to meet other circumstances of the institution and
   the requirements of this chapter.

   6. A person that has special skills or expertise, or is selected in reliance
   upon the person&#8217;s representation that the person has special skills or
   expertise, has a duty to use those skills or that expertise in managing and
   investing institutional funds.

HISTORY: 1973, c. 167, §§ 55-268.4, 55-268.6; 2008, c. 184, § 55-268.13;
2012, c. 614.