Nevada § 164.665 - Standard of conduct in managing and investing institutional fund

§ 164.665. Standard of conduct in managing and investing institutional fund

1. 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. 2. In addition to complying with the duty of loyalty imposed by law other than NRS 164.640 to 164.680 , inclusive, 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. 3. In managing and investing an institutional fund, an institution: (a) 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 (b) Shall make a reasonable effort to verify facts relevant to the management and

investment of the fund. 4. An institution may pool two or more institutional funds for purposes of management

and investment. 5. 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: (1) General economic conditions; (2) The possible effect of inflation or deflation; (3) The expected tax consequences, if any, of investment decisions or strategies; (4) The role that each investment or course of action plays within the overall investment

portfolio of the fund; (5) The expected total return from income and the appreciation of investments; (6) Other resources of the institution; (7) The needs of the institution and the fund to make distributions and to preserve

capital; and (8) An asset's special relationship or special value, if any, to the charitable purposes

of the institution. (b) Management and investment decisions about an individual asset must be made not

in isolation but rather in the context of the institutional fund'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. (c) Except as otherwise provided by law other than NRS 164.640 to 164.680 , inclusive, an institution may invest in any kind of property or type of investment

consistent with this section. (d) 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. (e) 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 or necessary

to meet other circumstances of the institution and the requirements of NRS 164.640 to 164.680 , inclusive. (f) A person that has special skills or expertise, or is selected in reliance upon

the person'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.