University of Texas Investment Management Co. on Monday approved raising the real estate, emerging markets equity and natural resources target allocations for the $20.1 billion in endowment assets UTIMCO oversees, confirmed Bruce Zimmerman, CEO, in an interview.
The real estate target will increase by one percentage point to 5.5%, while emerging markets equities and natural resources targets will increase by one-half of a percentage point each to 19.5% and 11.5%, respectively. The developed market equity target will be reduced by two percentage points to 48.5%.
These changes will be effective Sept. 1, the start of UTIMCO's fiscal year.
Target allocations remain unchanged for investment-grade fixed income at 9.5% and credit-related fixed income, 5.5%.
UTIMCO directors and the University of Texas System Board of Regents approved the new targets for the system's five endowment funds, during a joint teleconference Monday.
The expected annual return of the overall policy benchmark is expected to drop slightly to 8.81% for the new fiscal year, compared to 8.82% for 2011, according to meeting materials available on the Board of Regent's website.
UTIMCO managed a total of $27.2 billion as of June 30, including operating funds of the UT System.
Mr. Zimmerman confirmed that the Board of Regents approved UTIMCO's 2012 fiscal year budget, which will give employees an average base salary rise of 4%, at Monday's meeting.