Permanent University Fund (PUF)
The Permanent University Fund has not fared so well as of late. At the end of the 2002 fiscal year, August 31, the PUF was worth around $6.7 billion; it has not been this low since early in the 1999 fiscal year. At the end of the 2001 fiscal year, the PUF was worth about $7.7 billion, and the year before that was around $8.4 billion. Over the summer of 2000, it peaked at $8.6 billion. Having UTIMCO invest in buddies’ companies (and trying to hide it multiple times) has cost the students billions of dollars. See its performance.
In the constitution of 1876, a "Permanent University Fund" was created in addition to land granted by the state. In 1876, the University of Texas received one million acres of land in West Texas; in 1883, it was extended to two million acres. Surface interests, such as grazing, on these lands are put into another fund. Oil was discovered on this vast land in the 1920’s, and the PUF still receives royalties on oil and gas production. The Big Lake Oil Field and Yates Oil Field provided more than enough production to make the school incredibly rich. Also, according to the Texas constitution, the revenue produced from the UT-owned land must be spent in securities. Funny how some things work out.
The PUF is not the only endowment fund managed by UTIMCO. There is also the Permanent Health Fund, the Long Term Fund, the General Endowment Fund, and the Separately Invested Funds that consist of privately raised endowments and claim to be legal. At the end of the 2002 fiscal year all of the funds listed above were below their value after the 1999 fiscal year, with the exception of the Separately Invested Funds. There are also operating funds, such as the Short Term Fund, the Short Intermediate Term Fund, and the Institutional Index Fund. The value of each of these funds has drastically changed in the past year- some good some not. Investing in a stock market, as well in friends' businesses, has not fared well for students' money; the overall worth of the funds fluctuating much as a result. The funds for the UT System should be there for the UT schools, not for the use of UTIMCO.