As UTIMCO goes through changes, it still favors early stage, emerging funds

University of Texas Investment Management Company (UTIMCO), one of the largest university endowments in the country, has been going through many changes.

Two years ago after hiring Britt Harris as its CIO and CEO from the $155 billion Texas Teachers’ Retirement System, the $46 billion university endowment set out to reorganize how its private equity assets are managed.

First, UTIMCO’s four private market portfolios and teams were integrated into one. As a result, buyouts, growth equity, venture capital, emerging market private equity and private credit are now combined in a $6.9 billion portfolio, managed by a 10-person investment management team, said Senior Director Brad Thawley at a June 27 board meeting.

Second, the combined private equity portfolio is expected to increase by 50 percent over the next five years, but the bulk of this will come from increased allocation to large buyouts funds, said Thawley in June.

The big take away for venture capital is that despite being a consistent driver of UTIMCO’s performance over the last five years, the asset class’ exposure would not be increased.

Venture, with $2.4 billion in net asset value, has generated significant alpha for the endowment over a one-year, three-year and five-year periods. In fiscal 2018, VC returned 21.7 percent and more than 310 basis points of alpha as compared to the “Cambridge Global Venture Capital” benchmark, according to UTIMCO’s June board book.

However, UTIMCO’s current 7 percent allocation to venture capital, up from 5 percent in 2017, is relatively low compared to its peer. In 2017, the five largest endowments had an average of 13 percent of their portfolios allocated to venture, while 20 largest endowments had on average 8.5 percent of their overall portfolios in the asset class, Managing Director Susan Chen said during November 2017 board meeting.

During that meeting, Chen, who was at that time in charge of venture capital, said that the endowment has had good results with VCs raising first and second funds, and that UTIMCO will continue to look to invest in emerging, early-stage managers.

Union Square Ventures and Foundry Venture Capital are two examples of top-performers that were first time funds when UTIMCO invested, Chen noted. Since inception, Union Square 2004 vintage has generated 66.4 percent IRR and Foundry’s 2007 fund has returned 42.9 percent IRR.

In late 2017, UTIMCO had 40 venture managers and 16 premier managers and co-relationships were the bulk of the portfolio is concentrated, noted Chen in that meeting.

As a part of the recent private equity strategy change, the endowment plans to reduce the number of relationships for the aggregate portfolio, focusing on premier GPs. For venture, UTIMCO has a long-term target of 25 managers with an average $50 million in commitment to each fund, according to a June 2017 board report.

Source: UTIMCO Board Book, June 27, 2019.

Now, under the integrated private equity team, responsibility for tech venture assets was handed from Chen to Director Conrad Shang, who joined UTIMCO from Norwest Venture Partners in May 2017, according to his LinkedIn profile.

“Conrad is relatively new at UTIMCO, but he was a GP before and people who were GPs make good LPs,” said Chris Shonk, managing partner at Austin, Texas-based ATX Ventures. Shonk said that he “caught up with Shang” in June to discuss broad investment strategies.

While Shang manages tech-focused venture capital, VCJ also understands that Senior Director Patrick Pace continues to oversee the healthcare and life sciences investments, which at the end of 2017 comprised a quarter of the venture portfolio.

Source: UTIMCO Board Book, Nov. 29, 2017.

UTIMCO did not respond for comment.

The endowment has a big interest in new emerging managers and a tight co-investment process, Shonk said. “Many emerging managers are too small for UTIMCO. They do not want to write small checks and would not want to be more than 20 percent of a fund.”

He added that funds in the range of $200 million to $250 million is a sweet spot for them.


  • Name: University of Texas Investment Management Company (UTIMCO)
  • Type: Endowment
  • Headquarters: Austin, Texas
  • URL:
  • Total AUM: $46 bn
  • Size of VC porfolio: $2.3 bn
  • Allocation to PE/VC/Private Debt: 20% actual / 25% target
  • Allocation to VC: 7%
  • Head of venture program: Conrad Shang, Director
  • Stage preference: All stages, but most interest in early stage, emerging funds
  • Geographic preference: USA, China, Europe
  • Total number of VC firms in the portfolio: 40/ target 25