Texas University No Longer Wants Its Gold
(Kitco News) - Gold's luster is starting to tarnish for the University of Texas, as its endowment fund said that it is reviewing its gold holdings, worth about $1 billion, according to Bloomberg News.
The Bloomberg article quoted Britt Harris, the new chief executive officer at Utimco, saying, "We're in no rush to sell, but it may not be a long-term strategic hold."
The comments were made during a board meeting Thursday, where Utimco's new investment management team unveiled details of a total review "of every aspect of the endowment" in 2018.
"Everything is up for examination including asset allocation, risk management, compensation, and internal culture," according to the presentation.
The endowment's gold investment represents about 3% of its total assets, which as of the end of December 2017 is valued at almost $43.2 billion.
According to the article, Richard Hall, the former head of private equity at Harvard University endowment and now Utimco's new deputy chief investment officer, said initially invested in gold after the credit crisis, because the yellow metal was seen as a hedge against global currency debasement threats.
"Those systemic risks are not as prevalent," Hall said.
This is not the first time the endowment fund has adjusted its gold holdings. In 2013 it sold about $375 million in gold bars, but bring the value down to current levels.
The fund's review of its gold holdings comes as interest in gold as a safe-haven alternative asset is on the rise.
The consultancy firm, PwC, recently released a report that highlighted growing demand for alternative assets among Sovereign Wealth Funds. The researchers noted that gold is an attractive asset as funds take more defensive and diversified positions against overvalued equity and bond markets.
"Given that gold is a strategic investment, the asset class may gain momentum among this investor class in the coming years," the PwC report said. "Stabilization funds may, in particular, benefit from adding gold among their holdings as they are required to hold highly liquid assets to counter the effects of sudden macroeconomic shocks."