Texas U fund sold gold in February, bought gold futures and equities

Section:

Texas University Fund Sold $375 Million in Gold-Bar Holdings

By David Mildenberg
Bloomberg News
Wednesday, April 24, 2013

http://www.bloomberg.com/news/2013-04-24/texas-university-fund-sold-375-...

AUSTIN, Texas -- The University of Texas Investment Management Co., the third-largest U.S. academic endowment, sold $375 million in gold bars from holdings of about $1.4 billion and reinvested the proceeds in gold futures and equities.

In the three months that ended Feb. 28, the Austin, Texas- based fund bought $75 million in gold futures, $225 million in developed- market equities and $75 million in emerging-market equity futures, Bruce Zimmerman, the chief executive officer, said today in a telephone interview.

The fund, which manages $29.2 billion, started taking delivery of gold through futures contracts starting in 2008 as a hedge against inflation, Zimmerman said. While fund managers and directors remain concerned that global consumer prices may increase, the fund wanted to increase investments in equities, he said.

... Dispatch continues below ...



ADVERTISEMENT

Get the real story about the precious metals
from the Sprott Precious Metals Round Table

Now you don't have to travel to attend a financial conference to hear Sprott Asset Management's precious metals experts -- Eric Sprott, Rick Rule, and John Embry. They held a round-table discussion on February 12 and you can watch it on the Internet. Among their topics:

-- Why are precious metals such a compelling investment opportunity?

-- Why are non-G7 central banks buying gold? Do Western central banks have any left?

-- Why are investors buying as much silver as gold in dollar terms? What does this mean for the price of silver?

-- Is the growing supply deficit of platinum and palladium going to push their prices higher?

To watch the conference, please visit:

http://w.on24.com/r.htm?e=579230&s=1&k=70B829852A33CD255CC2A43ED63D18D0&...



"Our idea was to buy and hold gold, and when the world's central banks begin tightening, we'll sell," Zimmerman said. "The price of gold has traded off, but the world's central banks haven't started tightening."

The latest investment didn't change the fund’s overall exposure to the metal because of the leverage involved in its gold futures, Zimmerman said.

The fund hasn't bought or sold gold since February, he said. Its gold holdings are now valued at about $1.1 billion, while its cost basis is $967 million, he said.

Gold futures on the Comex in New York fell 12 percent in the 12 months that ended Feb. 28. On April 15, the price plunged 9.3 percent, the most in 33 years, after entering a bear market. On the following day, the metal touched a 26-month low of $1,321.50 an ounce.

Futures have tumbled 26 percent from a record $1,923.70 in September 2011, and exchange-traded products backed by the metal have dropped 13 percent from the all-time high in December, signaling that investors lost faith in the commodity following a 12-year rally. Goldman Sachs Group Inc., Barclays Plc, and Credit Suisse PLC are among banks that have cut their forecasts this year.

The largest academic endowments are Harvard University and Yale University, according to a Feb. 4 report by the National Association of College and University Business Officers.

* * *

Join GATA here:

World Resource Investment Conference
Sunday-Monday, May 26-27, 2013
Vancouver Convention Centre West
Vancouver, British Columbia, Canada
http://www.cambridgehouse.com/event/world-resource-investment-conference...

* * *

Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16