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10 <br /> THE BOTANICAL GARDEN FOUNDATION, INC. <br /> NOTES TO FINANCIAL STATEMENTS <br /> Page 4 of 13 <br /> CASH AND EQUIVALENTS <br /> Cash and equivalents consist of monies on deposit with a financial institution and with the <br /> University of North Carolina at Chapel Hill Temporary Investment Pool. The Temporary <br /> Investment Pool is a governmental external investment pool with funds available on demand. <br /> At times, the Foundation's deposits may be in excess of federally insured amounts. The <br /> Foundation has not experienced any financial loss related to such deposits. <br /> INVESTMENTS <br /> All investments are held in the UNC Investment Fund, LLC (the Fund). Investments are <br /> stated at fair value and are recorded on the trade or contract date. The estimated fair value of <br /> investments is based on quoted market prices, except for alternative investments for which <br /> quoted market prices are not available. The estimated fair value of certain alternative <br /> investments is based on valuations provided by the external investment managers adjusted for <br /> cash receipts, cash disbursements, and securities distributions through June 30. The Fund <br /> believes the carrying amount of these financial instruments is a reasonable estimate of fair <br /> value. Because alternative investments are not readily marketable, their estimated value is <br /> subject to uncertainty and therefore, may differ from the value that would have been used had <br /> a ready market for such investments existed. Such difference could be material. <br /> At June 30, 2011 and 2010, the investment allocation of the Fund consisted of the following: <br /> 2011 2010 <br /> Domestic Equity 18.5% 18.0% <br /> International Equity 15.9% 15.8% <br /> Global Equity 12.8% 11.3% <br /> Absolute Return 8.0% 8.8% <br /> Domestic Fixed Income 2.6% 4.2% <br /> Enhanced Fixed Income 7.5% 9.9% <br /> Private Equity 17.1% 15.7% <br /> Real Estate 7.4% 7.3% <br /> Energy and Natural Resources 7.5% 8.0% <br /> Cash 2.5% 0.7% <br /> Other 0.2% 0.3% <br /> 100.0% 100.0% <br /> These instruments may contain elements of both credit and market risks. The Fund utilizes <br /> selective derivative investment instruments to increase the yield and return on its investment <br /> portfolio given the available investment alternatives; to mitigate credit risk of default by a <br /> counterparty; and to control and minimize certain market risks. <br />