The Public University Fund (PUF)

UTIMCO, or the University of Texas/Texas A&M Investment Management Company, manages the PUF as well as other UT and Texas A&M assets. It was created as a 501(c)(3) nonprofit in 1996. The board is chaired by Paul L. Foster and includes appointees of the governor and university regents.

The Texas Constitution allocates two-thirds of the Available University Fund to the University of Texas System and one-third to the Texas A&M University System. The Available University Fund is the distributable income portion of the PUF, separate from the permanent endowment principal. These distributions fund operations, construction, and academic programs across both systems.

University Lands manages the 2.1 million surface and mineral acres in West Texas that form the PUF's original endowment. It negotiates oil and gas leases, pipeline easements, and renewable energy agreements on the acreage across Andrews, Reagan, Crane, Upton, and Ward counties. Surface-use and royalty income from these activities flows into the investable pool UTIMCO manages.

The PUF carries a structural advantage most endowments lack: a self-replenishing asset base from direct ownership of producing mineral properties in the Permian Basin. This royalty income stream allows UTIMCO to maintain significant illiquid allocations with lower pressure from liquidity demands. The fund also serves two entirely separate university systems, creating a distribution dynamic distinct from the single-institution endowments common among private universities.

UTIMCO has historically sought and obtained certain exemptions from Texas public-information requirements for specific investment records, arguing that disclosure of partnership terms and due-diligence materials would disadvantage the fund in private markets. The debate over transparency versus fiduciary confidentiality recurs in legislative sessions, with UTIMCO typically providing aggregate performance numbers while protecting manager-level details.

Oil and gas royalty income from University Lands acreage moves with commodity prices, introducing revenue volatility that pure financial endowments do not experience. Sustained low oil prices compress the royalty stream flowing into the investable pool. UTIMCO's diversified portfolio partially offsets this, but the fund's permanent capital base is more directly exposed to West Texas hydrocarbon economics than any peer endowment.

The UTIMCO board includes nine members appointed by the University of Texas System Board of Regents, four appointed by the Texas A&M System Board of Regents, and the chancellors of both systems as ex-officio, non-voting members. The UT System board chairman can designate the UTIMCO chairman. The board sets asset-allocation policy, hires the CEO/CIO, and oversees performance of all managed pools including the PUF.