In 1991, when Jack Rich joined the university as Chief Financial Officer, the endowment was valued at $50 million. Fast forward to today, and the endowment currently sits between $395-$400 million with Jack Rich serving as the Chief Investment Officer for the endowment.
The endowment is made up of monetary gifts or income producing property given to the university. Generally, the endowment is kept intact, with the income generated from investing it, being used to fund the university’s day-to-day operations.
The investment strategy for the endowment has gone through many iterations since the 1940’s. In the 40’s, the endowment consisted mainly of royalties interests in the oil and gas industry, with some continuing to providing value to this day. In the 80’s, investments were made into primarily fixed income assets and bonds.
Nowadays, the endowment is invested in a plethora of asset classes ranging from public equities in domestic and emerging markets, hedge funds, private equity, real estate and fixed income assets.
Notably, the endowment also manages a 25,00 acre ranch in West Texas. Rich said the university has been working for the last 3 years on ways to monetize the property.
“We are actively working on a wind farm on that facility” Rich said. “We are optimistic that it will actually be started in spring to summer of next year.”
Rich said that the most worriesome economic factor going forward, which might impact the endowment, is the potential over valuation of the U.S. stock market. If prices were to drop as markets adjusted and corrected for the overvaluation, investors could see a lower return on investment.
“The conversation in the endowment world is that things look like they are overvalued, especially in the united states,” Rich said “We have a pretty diversified portfolio, we have wide-spread investments so hopefully we could weather that slow down.”