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Texas Tech University System Endowment Fund

Name: Texas Tech University System Institutional Advancement

Assets Under Management: $979 Million (Source: Texas Tech University System on February 2014)

Annual Report: Texas Tech University System Long Term Investment Fund Endowment Report February 2014

Portfolio Insights: The Long-Term Investment Fund’s (LTIF) objective is CPI +5%. The LTIF is ahead of the objective for the QTD, 1-year and 5-year periods and trailing over the 3 year and 10 year period. It is hard to believe, but the financial crisis that impacted virtually all global assets is technically five years behind us at this point. This is the driving reason you are seeing substantial improvements in the return numbers. The LTIF equity portfolio returned 23.51% last year and delivered 15.08% for the five year period. These are remarkable returns. This has been primarily driven by improvement in stocks globally, but especially in the United States as seen by looking at the MSCI World Index returns compared to the S&P500 index returns. In normal market environments, a diversified portfolio typically outperforms a less diversified portfolio. In today’s extreme global monetary easing environment, any diversification away from developed market equities detracted from performance. Fixed Income and Real Assets both performed poorly due to lagging global GDP and increased expectations for rising rates. (Source)

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Top Texas Tech University System Endowment Fund Headlines:

1) Texas Tech University System endowment, Lubbock, hired Waterfall Asset Management to run $30 million in an asset-backed securities and loans-focused strategy, said Timothy Barrett, chief investment officer. Funding is coming from cash flow and a restructuring of the credit portfolio. No managers have been terminated yet, but could be eventually, wrote Mr. Barrett in an e-mail. The endowment’s target allocation to liquid credit is 15%. The $1 billion endowment also committed $18 million to Fortress Investment Group’s Worldwide Transportation and Infrastructure Investors fund. The Fortress allocation is part of the endowment’s private real assets portfolio. The endowment’s target allocation to private real assets is 10%. (Source)

2) Texas Tech University System has engaged Maples Fund Services to provide consolidated risk and transparency reporting services to its US$1 billion endowment. These reports are an integral part of an overhaul of Texas Tech’s investment programme, subsequent to the arrival of their new Chief Investment Officer last year.

Maples Fund Services was selected for its experience in working with complex investment programmes at other institutional investors. The customisable nature of Maples Fund Services’ reports and technology was also important, as was the industry knowledge and technological expertise of the Maples Fund Services team. (Source)

3)  The Texas Tech University System endowment is expanding its allocation to private equity, credit, real estate and real assets, with an eye toward ramping up its exposure to these strategies to 30% of its assets under management from the current 23%, according to a May report.

The university system last year restructured its $1 billion endowment and redefined its asset classes after Timothy Barrett came on board as Texas Tech’s new chief investment officer. He was previously overseeing roughly $5 billion in defined benefit retirement assets for Eastman Kodak Co. (Source)

4) The Texas Tech University System invites applications for the position of Chancellor. The Texas Tech University System is a nationally acclaimed higher education system with one of the largest contiguous campuses in the United States. The System’s four universities, multiple academic sites and health sciences campuses have a total enrollment of more than 44,000 students (2013), and the TTU System is approaching 290,000 alumni. Headquartered in Lubbock, the System employs approximately 17,000 and has an annual operating budget of $1.7 billion. (Source)

5) The Texas Tech University System is committed to excellence at all levels and supports the highest degree of ethical conduct. In recognizing its obligation to students, employees, and constituents to maintain the highest ethical standards, Texas Tech has established a hotline to provide a confidential avenue for reporting. Texas Tech has selected a private contractor, EthicsPoint, to provide this service for the Texas Tech community. Reports submitted through EthicsPoint will be forwarded to university officials for prompt and appropriate action. The Texas Whistleblower Act protects anyone who, in good faith, reports unlawful activity from retaliation for making such a report. The EthicsPoint system is intended to offer an additional means of reporting to individuals unable to use existing reporting procedures. However, we encourage employees and constituents to attempt the resolution of concerns through established channels whenever possible. (Source)

About Richard C. Wilson