By Clay Robison
Houston Chronicle Austin Bureau
April 25, 2003, Friday

AUSTIN - University of Texas System Chancellor Mark Yudof has told UT's investment manager that two attorney general opinions are enough - performance records for high-risk university investments are public information and should be treated as such.

Yudof told the University of Texas Investment Management Co. to seek no additional attorney general rulings on future requests for public disclosure of internal rates of return for UTIMCO's private equity investments, which invest directly in businesses rather than trading in stocks.

A spokesman for UTIMCO President Bob Boldt said the management company will comply and release the information when requested.

"The UT system is our client," the spokesman said.

Attorney General Greg Abbott ruled on April 2 that the investment records were public, rejecting arguments from fund managers that the information was exempt from the Texas Public Information Act for competitive reasons.

Former Attorney General John Cornyn, Abbott's predecessor, also had ruled in favor of public disclosure last fall after the Houston Chronicle reported on secrecy surrounding the fund.

After Cornyn's ruling, UTIMCO released performance data on all its managers. Boldt said then that Cornyn's ruling applied only to records available at the time. He sought a subsequent ruling from Abbott, which he said was necessary to give UTIMCO permanent legal cover from potential lawsuits that might be filed by the fund managers.

After Abbott ruled, Boldt released records that had been requested to that point, but said he still wasn't sure the opinion applied to future requests for the same information. He raised the possibility that UTIMCO could seek additional rulings from the attorney general, which would have the effect of delaying the release of information.

In a letter to Boldt written by UT lawyer Cullen M. Godfrey, Yudof said he recognized "the strong interest in the public's right to know about its public institution's financial arrangements and the fact that no private equity partnership has demonstrated to the attorney general's satisfaction a basis for maintaining that information as confidential."

Godfrey also said the UTIMCO board may want to review the public disclosure policy it adopted on Sept. 18, 2002, for "any appropriate revisions that may be indicated." He also said that UT's Office of General Counsel, which he heads, "would like to review any new private equity confidentiality agreements prior to UTIMCO entering into them."

The Permanent University Fund managed by UTIMCO has suffered during the recession. The trust fund, which pays for capital construction projects for UT and Texas A&M, is expected to produce $15 million less this year than it did a year ago.

The UTIMCO board is made up of UT and Texas A&M regents and private investment advisers.