UT endowment second-largest in the nation, according to Bloomberg data

The University of Texas System’s building in Austin.
The University of Texas System’s building in Austin. The Texas Tribune

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.

Texas Christian University also benefited from its energy holdings. Ten percent of its $1.6 billion endowment is allocated to energy, with more than two-thirds in mineral rights it received from donors, said James Hille, the investing chief.

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 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.

Abilene Christian University, a small private college west of Fort Worth, committed a quarter of its $450 million endowment to energy, including a big bet on the Permian region, Bloomberg reported. The fund gained 15.8 percent in fiscal 2018, better than most wealthy U.S. colleges and eking past Bowdoin College’s 15.7 percent return.

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.