UTIMCO's Latest Investments

This week we’ll look at updates to UTIMCO's manager roster from recently filed disclosures. OWL users can view full details for UTIMCO’s portfolio and thousands of other LPs using OWL’s allocator holdings database.

Established in 1996, UTIMCO was the first investment corporation created by a public university system. Today, UTIMCO is the largest endowment system in the United States, overseeing investments for the University of Texas and Texas A&M systems. UTIMCO’s CIO, Rich Hall, joined in 2018 after time at Harvard Management Company and the Teacher Retirement System of Texas. UTIMCO returned 10.5% across their three primary endowment funds in FY24 and as of 10/31/2024, those endowments stood at $62.3 billion.

UTIMCO has a significant allocation to large quant and multi-manager firms including Marshall Wace, Balyasny, DE Shaw, Two Sigma, Exodus Point, Millennium, and Walleye. These 7 firms collectively represent nearly 15% of UTIMCO’s disclosed fund investments. The investments with those managers include a mix of long-only products and hedge fund vehicles, the latter of which are included in UTIMCO’s “Stable Value” bucket:

Hawk Ridge Capital is one of the new additions to UTIMCO’s manager roster. Founded in 2005 by David Brown, Hawk Ridge runs a long/short equity strategy in small & mid cap equities both in the US and developed international markets. In describing Hawk Ridge’s process, Brown said “we research companies that are off the radar for whatever reason. Either they are new to the public market, or they are smaller, or they have some complexity that causes other investors not to look at them.” Following a passion for investing in high school, Brown started Hawk Ridge five years out of college with $4 million of capital and, as of the latest filings, manages $4.4 billion.

The timing of UTIMCO’s investment in Hawk Ridge coincides with CIO Rich Hall’s presentation to the board in September telegraphing a positive outlook for small-cap equities. Hall noted that despite the material underperformance of small caps vs. large caps, earnings expectations for small caps are nearly double that of large caps, and small caps typically perform well in historical rate-cutting cycles. Hall noted: “as rates go down small caps rally, we saw this in early 2020 and the flow through to free cash flow is extensive. It’s why the market is talking about small caps.”

Other News & Events

• White paper from Old Farm Partners on the case for hedge funds and active management

• Podcast with COO of VCIMCO

• Kamehameha Schools is hiring a Director of Real Estate Investments

• UVA is hiring a Managing Director of Public Equity

• Kansas endowment is hiring a Head of Private Equity

About Old Well Labs

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Disclaimers

Returns represent the return on invested capital of publicly disclosed long positions, as calculated by OWL. Actual returns may vary based on a number of factors, including (but not limited to) undisclosed positions, short exposure, non-equity holdings, cash holdings, and lagged disclosure of positions.

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