Note: Use a Word document and submit through Safe Assign
Tom Brady is 70 years of age (or it sure seems like it), is in excellent health, pursues a simple but active lifestyle, and has no children. He has interest in a private company for $90 million and has decided that a medical research foundation will receive half the proceeds now; it will also be the primary beneficiary of his estate upon his death. Tom is committed to the foundation’s well-being because he believes strongly that, through it, a cure will be found for the disease that killed his wife. He now realizes that an appropriate investment policy and asset allocations are required if his goals are to be met through investment of his considerable assets. Currently, the following assets are available for use in building an appropriate portfolio:
$45.0 million cash (from sale of the private company interest, net of pending $45 million gift to the foundation)
10.0 million stocks and bonds ($5 million each)
9.0 million warehouse property (now fully leased)
1.0 million residence
$65.0 million total available assets
a. Formulate and justify an investment policy statement setting forth the appropriate guidelines within which future investment actions should take place. Your policy statement must encompass all relevant objective and constraint variables. Be sure to use the proper format discussed in class. You do not have to do a complete portfolio. Simply state asset classes and the percentages you would use.
The format he wants you to use on all relevant objective and constraint variables is on slide 8 in the powerpoint.