The combined endowment pools of University of Texas and Texas A&M University systems returned 3.97% for the fiscal year ended Aug. 31, a performance report for Thursday’s meeting of the board of University of Texas Investment Management Co. showed.
Annualized returns for the combined portfolios of the $17.9 billion Permanent Fund and the $7.4 billion Long Term Fund, which are managed by Austin-based UTIMCO, were 6.36% for the three years ended June 30; five years, 6.21%; seven years, 8.34%; and 10 years, 5.47%. Policy portfolio returns were not provided in the report for benchmark comparison. UTIMCO organizes the endowment portfolio into three units which produced the following one-year returns as of Aug. 31: more correlated and constrained, 4.8%; less correlated and constrained, -0.82%; and private investments, 6.42%.
The asset allocation for UTIMCO’s umbrella portfolio categories as of Aug. 31 were 37.3% MCC, 36.4% private investments and 26.3% LCC. Broad asset class weightings were 58.4% equity, 24.2% real assets and 17.4% fixed income.
The best-performing asset classes for the 12-month period were in the more correlated and constrained portfolio with credit-related investments returning 17.69%, followed by emerging market equities, 12.38%. Within private investments, real estate returned 10.97% and developed market private equity, 8.88%.
The portfolio’s only negative return for the fiscal year from an individual asset class was -2.29% from investment-grade fixed income within the less correlated and constrained portfolio, according to the UTIMCO meeting book.