UTIMCO vows to open most records

Corporation that oversees university systems' investments says few partners will fight release

By Sharon Jayson, AMERICAN-STATESMAN STAFF
Copyright 2002 The Austin American Statesman
September 22, 2002

The management corporation overseeing investments for the state's two largest university systems promised Saturday to disclose by midweek much of the information it has kept secret about its private investments and fund managers.

And the University of Texas System Board of Regents, which oversees that agency, voted unanimously Saturday to endorse such openness.

Bob Boldt, president and chief executive officer of the University of Texas Investment Management Co., told UT System regents that since the UTIMCO board approved a full and fair disclosure policy Wednesday, his staff had contacted about two-thirds of the more than 70 general partners involved in more than 140 partnerships with the management company. "Right now, as a rough gauge, about three out of every 10 (general partners) have indicated they will probably try to seek an exemption from disclosure," he said.

UT System Chancellor Mark Yudof called response from the majority of general partners positive.

"With respect to the remainder of those, we are hoping some of them -- most of them; all of them -- will see the light because of the strong pro-disclosure position taken by the Board of Regents and by the UTIMCO board," he said.

Those who object to disclosure will find themselves before the state attorney general "with our strong view that the attorney general ought to allow the disclosure," Yudof said.

Income from UTIMCO's $14.5 billion portfolio goes to the UT and Texas A&M university systems and helps pay for such things as faculty salary enhancements and research.

The debate about disclosing information has been focused on whether to release private equity investment information -- particularly the internal rate of return.

The internal rate is a complex industry calculation used to measure the return on the investment that the partnerships earn over time, Boldt said.

Even though not all of the agreements between UTIMCO and its partners required confidentiality, Boldt said UTIMCO kept the data under wraps because of concern that some partnerships may decline to do business with the management company if certain information is made public.

"We didn't want to be known in the industry as someone who would disclose that informa- tion," he said.

Yudof and UT System regents Chairman Charles Miller last week pressed UTIMCO to reverse that stand.

Miller, a longtime investment expert who is not on the UTIMCO board, said Saturday that the company's confidentiality policy was in line with standard investment procedure.

"We were not doing anything that anyone could even marginally consider illegal, against the law, against regulations, against rules, against statutes, against culture, against practice," he said.

UT Regent Woody Hunt, who also serves on the UTIMCO board, said Boldt will present a full financial report Oct. 10 when regents gather in Austin.

While part of Saturday's special meeting was spent discussing UTIMCO, it was called to name a new president for UT Health Center at Tyler.

Kirk Aquilla Calhoun, a senior vice president and medical director at Parkland Hospital in Dallas, was appointed to succeed the facility's retiring president, Ronald F. Garvey.

sjayson@statesman.com; 445-3620