The University of Texas System Endowment replaced Yale University as the nation’s second-largest endowment in 2021.
The $42.9 billion endowment has specifically increased in value relative to its peers due to its oil and gas revenues generated from the 2.1 million acres of land it owns in the Permian basin of the United States. West Texas, an asset co-owned with Texas A&M University.
Although the placement is not ideological, the system has benefited from maintaining its investment in the oil and gas industry, as other universities have chosen to reduce theirs. Perseverance with the sector
In its fiscal year 2021 financial statements, the Permanent University Fund, a state wealth fund created to finance endowment and higher education, saw its revenue increase to $979.2 million in 2021, in increase of 27% compared to the previous year, on the mining revenues produced by its lands. assets.
Conversely, in April 2021, Yale set out investment principles that sought to restrict its investments in fossil fuels because of the emissions they produce.
Yale’s Investment Office outlining the updated investment philosophy that investment firms should not “undermine, but support sound government regulation, accurate climate science, and public communication about commodities.” fossil fuels, climate science, climate change and industry self-regulation in the face of climate change”.
Similarly, earlier this year Princeton University’s board of trustees voted to divest itself of 90 companies in an administrative process focused on companies involved in the thermal coal and oil sands segments. of the fossil fuel industry or who are engaged in climate disinformation campaigns.
After surpassing most Ivy League institutions, the UT system’s endowment is expected to challenge Harvard’s $53.2 billion endowment as the largest endowment by total net assets in 2022. that it should be noted that the University of Texas system has a student population of over 244,000 across 13 institutions, meaning the endowment holds $175,820 per student, a far cry from Princeton’s $3.294 million, Yale’s $2.172 million or Harvard’s $1.745 million per student.
So far in 2022, crude oil is up another 20% year-to-date. The upward trend in the price of oil should help the UT system close the 24% gap between its $42.9 billion endowment and Harvard’s $53.2 billion nest egg.
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Keywords: ESG, oil and gas, Princeton, University of Texas Systems, Yale