The UT System endowment fund, a pool of money dedicated to funding institutional initiatives and research, has always been one of the largest in the country. But in December, it grew to become the second largest in the United States, surpassing Yale University.

Although Yale and the UT System have been fighting over this spot for years, Britt Harris, chief investment officer of the University of Texas Investment Management Company, said UTIMCO refrains from measuring themselves against Harvard or Yale to show success.

“The bottom line is, are we setting and meeting the highest standards of performance so that UT institutions have the resources they need to provide the best education and health care possible to the people of Texas,” Harris said in an email.

The System’s endowment fund reached $31 billion dollars, $8 billion shy of Harvard University’s, which remains the largest in the country. UT’s endowment is split among four different funds: the Permanent University Fund, the Permanent Health Fund, the Long Term Fund and the Separately Investment Funds, all managed by UTIMCO. A portion of the largest fund, the Permanent University Fund, goes to both the UT System and the Texas A&M System, but the UT System keeps two-thirds of the money. 

The endowment receives revenue from two main sources: the land set aside by the Texas Constitution in the 1800s for the development of UT and A&M, and UTIMCO’s investments in stocks and bonds. University Lands receives money by leasing land to companies to extract the oil discovered on the lands in the 1920s, along with other revenue streams such as motels, service stations and a winery.

Mark Houser, CEO of University Lands, said an increase in gas prices and more business-focused management practices on University Lands in 2014 increased the money in the endowment.

“That’s been a big difference ­… the staff that’s been added to modernize the management make it operate more like a business,” Houser said. “That has caused us to improve our performance pretty significantly.”

Along with the increase in revenue from University Lands, Harris said UTIMCO’s investment in stocks and bonds contributed to the growth. Harris said UTIMCO is planning to increase the endowment by five percent every year. 

“Over the last year, UTIMCO has heightened its commitment to our mission, which is to support UT and A&M institutions by generating superior long-term investment returns,” Harris said. “Our goals included addressing underperforming areas while increasing productivity, expanding investment capabilities and modernizing our analytical systems.” 

UT receives 53 percent of the System’s portion of the Permanent University Fund. This money goes toward initiatives and projects not otherwise funded by the state or the flagship campus’s own endowments, which are more restricted by their donors. 

Mary Knight, special assistant to UT’s chief financial officer, said while the money doesn’t go toward projects that need consistent funding, such as decreases in tuition, it does go toward supporting UT initiatives, such as the financial aid expansion for undergraduate students.

“This investment can fluctuate,” Knight said. “Although we’re seeing nice increases now, there have been years where we have actually had reductions in our available University fund, so we do have to be careful about how we spend it for recurring purposes … it’s not directly affecting tuition, but it is lowering the effective rate of tuition by giving more scholarships.”