University of Texas System, Austin, might be able to store the $662 million worth of gold bars owned by its endowment funds much closer to home.
Gov. Greg Abbott signed a bill last month establishing a state-run depository to serve as the custodian, guardian and administrator for gold bullion and other precious metals.
“With the passage of this bill, the Texas Bullion Depository will become the first state-level facility of its kind in the nation, increasing the security and stability of our gold reserves,” Mr. Abbott said in a statement.
University of Texas Investment Management Co., Austin, manages a total of $25.6 billion in the system's two long-term endowment funds. The physical gold holdings are now stored in a vault in Manhattan, said Jenny LaCoste-Caputo, a UT spokeswoman.
Whether UTIMCO will bring its gold bars to Texas depends on a number of factors, Ms. LaCoste-Caputo said, including:
- if the depository is built;
- if the depository is a member of the Chicago Mercantile Exchange, which facilitates the sale and purchase of gold bars through the gold financial futures market; and
- if the cost of storage in Texas is equal to or less than the fees being paid now.
“If UTIMCO owns any gold bullion at that time, then yes, a move to the Texas depository will be seriously considered,” Ms. LaCoste-Caputo said.