Qubit: UT System Oil & Gas Liquidity
Most endowments will likely have a down year in FY 2022 because of tech and venture.
But the University of Texas System will keep getting cold hard cash from its oil and gas assets.
This is why you diversify your portfolio.
“Land operated by the University of Texas System is on track to post its best-ever annual revenue in fiscal 2022 because of soaring oil prices and production on its property in the Permian Basin. Oil reached a high of $120 a barrel earlier this year as a result of a war-induced energy crunch. The revenue is expected to help narrow the gap between the Texas system’s $42.9 billion endowment and Harvard’s $53.2 billion as of June 2021.”
“The oil and gas revenue will help insulate the University of Texas System from all that. It’ll stem concerns about liquidity and help investment managers hunting deals in a down market. It also represents hard cash, instead of gains tied up in investments like private equity and venture capital, which is more typical for the richest college endowments and drove record returns in the prior year. Meanwhile, even if the Texas system shows negative investment returns, the revenue could help protect the endowment value.”
Source:
Harvard’s Status as Wealthiest School Faces Oil-Rich Contender in the University of Texas
The Permanent University Fund (PUF)
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