Two UTIMCO Key Funds See 1.4% Second Quarter Return

The Texas endowment's Permanent University and Long Term funds post gains of 5.8% over a 10-year period.

The University of Texas/Texas A&M Investment Management Co.’s (UTIMCO) key funds reported gains of 1.4% for the second quarter ended June 30, 2018, according to a preliminary performance summary.

Both the $21.5 billion Permanent University Fund and the $9.2 billion Long Term Fund returned also returned 5.8% over the 10-year period. With a combined total of $30.7 billion, the two funds make up the bulk of UTIMCO’s $32.2 billion in Total Endowment Funds.

The Permanent University Fund gained 11.3% over the one-year period, while the Long Term Fund brought in 11.6%. The endowments were just 20 basis points off on their three- and five-year returns, at 7.5% and 7.7% for the three-year trial, and 8.3% and 8.5% for five.

The endowments annualize their multiyear returns. Benchmarks were not provided.

“Both of these portfolios are managed roughly identically, so we expect returns to be extremely close over most time horizons with occasional differences due to capital activity and account structure,” Karen Adler, a spokeswoman for UTIMCO, told CIO.

In addition, the University of Texas’ Board of Regents approved a new asset allocation for the endowments. Global equity, stable value, and illiquid asset targets will be raised, while cutting weight in real returns and alternatives Adler said. Global equity targets will rise 1.5%, to 63% of investments. Stable value will go to 18%, from 17%; and illiquid assets now aim for 44%, from 40%. Real return will drop to 19%, from 21.5%. Alternatives have now been trimmed from 61% to 59%.

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