AUSTIN – Endowments benefitting institutions in The University of Texas System and Texas A&M University System posted a 16.8 percent return for the year ending June 30, a sharp turnaround from a year earlier when market volatility and a national economic downturn caused endowments to lose value across the country.
"The recent surge in returns could be attributed to a turnaround in capital market conditions and sound investment practices that reduce risks and take advantage of recovering markets,” said Bruce Zimmerman, CEO and chief investment officer of The University of Texas Investment Management Co. (UTIMCO), the firm that manages endowments for the two largest public higher education systems in the state. “The UTIMCO team continues to work diligently to manage these assets for the benefit of the students, faculty and staff of these great institutions.”
The sharp increase totals more than $2.3 billion including $1 billion due to staff efforts resulting in actual returns exceeding the policy benchmark, making UTIMCO one of the top performers of university endowments in the nation.
For Fiscal Year 2010, which ended August 31, the funds realized an investment return of more than 13 percent. And, the endowments have recouped more than 98 percent of their value from two years ago as compared with the S&P 500, which recouped 82 percent, Zimmerman said.
UTIMCO is a 501(c)(3) investment management corporation whose sole purpose is the management of investment assets under the fiduciary care of the Board of Regents of The University of Texas System. Created in March 1996, UTIMCO is the first external investment corporation formed by a public university system in the nation. It invests endowment and operating funds in excess of $16 billion. UTIMCO is governed by a nine-member Board of Directors. The UTIMCO Board of Directors includes three members of The University of Texas System Board of Regents, one member selected from a list provided by The Texas A&M University System Board of Regents, the Chancellor of The University of Texas System, and four outside investment professionals appointed by the UT System Board of Regents.
Serving the educational and health care needs of Texans for more than 125 years, The University of Texas System is one of the nation’s largest higher education systems, with nine academic campuses and six health institutions. The UT System has an annual operating budget of $11.9 billion (FY 2010) including $2.5 billion in sponsored programs funded by federal, state, local and private sources. Preliminary student enrollment exceeded 202,000 in the 2009 academic year. The UT System confers more than one-third of the state's undergraduate degrees and educates nearly three-fourths of the state's health care professionals annually. With more than 84,000 employees, the UT System is one of the largest employers in the state.