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Bloomberg: UT endowment second-largest in the nation, TCU, ACU grow with energy investments

December 26, 2018

Bolstered by booming oil prices, the University of Texas’ endowment hit $31 billion in value this summer, according to data compiled by Bloomberg News — making UT’s endowment second only to Harvard University’s in size among the country’s institutions of higher education.

Harvard’s endowment had a value of $39.2 billion, according to Bloomberg’s data. Yale University, whose endowment often tops UT’s in value, was at $29.4 billion, though the Texas system’s more than 235,000 students dwarf Yale’s 12,300.

The price of oil has dropped since the fall, a change not reflected in Bloomberg’s numbers, which are current through June 30.

The Texas endowment dates back to 1876, when the state set aside more than 1 million acres of West Texas land to support the development of the UT and Texas A&M; University systems. The value of the fund shot up with the discovery of oil, and the advancement of hydraulic fracturing technology. In 2010, the fund was worth some $10.7 billion. Last year, it was up to $19.5 billion.

Typically, royalties earned off the land are invested in stocks, bonds and other assets by the nonprofit University of Texas/Texas A&M; Investment Company, or UTIMCO. About 5 percent is paid out each year to UT and A&M;, with UT receiving two-thirds of the distribution — this year, a record $1 billion. From there, the system can spend its oil money on capital projects and administration, and the remainder is sent to the system’s flagship Austin campus.

According to Bloomberg, Texas Christian University, in Fort Worth, and Abilene Christian University also saw their endowments benefit from energy holdings. 

Disclosure: The University of Texas System, the University of Texas at Austin, Texas A&M; University and Texas Christian University have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here. 

“UT endowment second-largest in the nation, according to Bloomberg data” was first published at by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

TCU, ACU also see endowments grow with energy

According to the Dec. 24, Bloomberg article, Texas Christian University has 10 percent of its $1.6 billion endowment allocated to energy. More that two-thirds of that is in mineral rights it obtained from donors.

Further west, Abilene Christian University has fully a quarter of its $450 million endowment in energy, including a big portion devoted to the Permian basin, a few miles west of the city and the hottest energy play in the country at the moment. According to the Bloomberg article, ACU’s fund gained 15.8 percent in fiscal 2018, better than most wealthy U.S. colleges.

According to Bloomberg, ACU decided in 2013 to take shares in Texas Pacific Land Trust, which has large tracts of land in the Delaware Basin, part of the Permian. Texas Pacific was a winning stock when the shale boom began in West Texas. – FWBP Staff

To read the Bloomberg story, click here.