Investment Approach

TUFF's work ideally begins with a conversation.  It’s common for TUFF to receive a call from a university administrator with a challenge relating to the delivery of a facility.  The ensuing dialogue often leads to a thorough evaluation of the Institution’s key objectives, precise programming requirements, and practicable solutions.

When this evaluation points toward TUFF making a strategic investment, TUFF will typically enter into a long-term master lease with the Institution or an affiliate foundation for the sole objective of delivering a build-to-suit facility that is constructed to the exact design specifications of the institution at the lowest possible cost.  In doing so, TUFF effectively bears all the execution, construction, interest rate, and ongoing ownership risk of the facility development, while the institution maintains complete control of the asset during the life of the master lease. The overriding key is that transaction is structured so that the appropriate parties take the appropriate risks.  TUFF's core competency is providing financing solutions, which complements Institutions' strength of educating students, performing research, and fundraising.  There is a natural division of risk associated with missions that TUFF integrates into every investment structure.  Though the conveyance and bargain purchase option may have accounting impact, TUFF's mission is to gift long-term ownership to the Institution at the appropriate time.

To facilitate an efficient use of resources, TUFF adheres to a strict underwriting policy to guide the investment decisions that are made.   Though TUFF’s charitable benefits manifest in several ways, the organization leverages its balance sheet for the benefit of Institutions in six key areas:

  • Direct gifts and grants
  • Financial contributions into projects
  • Below market facility lease terms
  • The strategic use of its investment grade credit
  • Gift of ownership interest of facility at end of lease term
  • Provision of a bargain purchase option (if applicable)