The agency that oversees the endowments for Texas' colleges and universities is paying a lot of money to outsource the work of managing the schools' investments, the Austin American-Statesman reported today.

From Eric Dexheimer's story about UTIMCO, the University of Texas Investment Management Co., and its largest fund, the Permanent University Fund:

Today, about 86 percent of [the Permanent University Fund's] assets are handled by external managers. By comparison, the Employees Retirement System of Texas outsources 25 percent of its investments; at the Teacher Retirement System of Texas, the figure is less than 10 percent ...

While the Permanent University Fund is the state's fourth-largest trust fund in terms of assets, it has been the most expensive to manage, according to the Legislative Budget Board's latest study comparing public investment funds.

In 2007, for example, UTIMCO paid a little over $28 million in fees to manage the then-$11.7 billion university fund — more than $20 million of that to external advisers. By comparison, managing the Teacher Retirement System Pension Trust Fund, whose investments that year were handled almost entirely by state employees, cost only $21 million — even though the teachers' fund is nearly 10 times the size of the Permanent University Fund.

Dexheimer noted further down in the story that five top investment officials with the state teachers' retirement system -- another enormous publicly run investment agency -- broke the $200,000 mark in our database of state workers' 2007 pay records.

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