Endowment funds are a permanent, self-sustaining source of funding, and must be managed with consideration given to current and future beneficiaries with the goal of providing the same level of economic support to both in perpetuity. Endowment assets are generally invested with a view toward long-term capital appreciation. Each year, a portion of the endowment value is paid out to support the donor’s designated purpose or other purpose, and any investment earnings in excess of these distributions help build the fund’s market value over time. In this way, an endowment represents a permanent legacy and provides the means to create a margin of excellence in higher education for The University of Texas and The Texas A&M University Systems.
UTIMCO manages four major endowment funds under the fiduciary care of the UT System Board of Regents, the Permanent University Fund (PUF), the Permanent Health Fund (PHF), the Long Term Fund (LTF), and the Separately Invested Funds (SIF). The PHF and the LTF are pooled and invest in shares of the General Endowment Fund (GEF).
Operating funds are used primarily to fund UT System institutions' short-term operating needs as well as long-term institutional needs associated with capital programs, financial reserves, and endowment matching funds. The UT System institutions have two investment fund options, the Short Term Fund (STF), and the Intermediate Term Fund (ITF).