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University of Texas' investment chief Bruce Zimmerman resigns

BOSTON, Oct 10 (Reuters) - The University of Texas said on Monday that Bruce Zimmerman, who invested some $37 billion on behalf of the public university system, has resigned after nearly a decade on the job.

Zimmerman, 59, stepped down as chief executive officer and chief investment manager of the University of Texas Investment Management Co, known as UTIMCO, effective immediately, the school and Zimmerman said. He started in the position in 2007 when total assets at UTIMCO, which manages money for the University of Texas, Texas A&M University and the Permanent University fund, stood at $23.5 billion.

The school said it is launching a national search to find a replacement and will name an interim CIO and CEO.

Known as a skillful investor, Zimmerman was also a prominent backer of big-name hedge funds, having at one point invested as much as 30 percent of the portfolio in funds including Ray Dalio’s Bridgewater Associates, Seth Klarman’s Baupost Group and Andreas Halvorsen’s Viking Global Investors.

His departure marks more change at the nation’s biggest endowments coming only weeks after Harvard named its fourth investment chief in the last decade.

For the fiscal year ended on Aug. 31, the Texas fund earned a 4 percent return. For the 12 months ended on June 30, when most universities end their fiscal year, the endowment was down 0.7 percent, Zimmerman said. The performance ranked it as the 9th best among 64 endowments that invest $1 billion or more, Zimmerman said, calling it “not a bad year.”

The university said that funds under UTIMCO’s management make up the third-largest university endowment in the country, after Harvard and Yale. Harvard lost 2 percent last year while Yale gained 3.4 percent, the schools reported last month.

Zimmerman said he was “incredibly proud” of what he achieved at UTIMCO but that the board was ready for a change and that he is eager for a new challenge.

“I might do a little fishing but one option is definitely off the table. My wife has made it clear that I can’t retire,” Zimmerman said in an interview. He said he does not have a new position line up and will take time to review options.

While many large investors, including pension funds, are scaling back on their hedge fund investments, Zimmerman said “Many astute investors are maintaining their allocation to hedge funds.” UTIMCO currently has about 25 percent of its portfolio invested in hedge funds, more than the average endowment’s roughly 20 percent allocation to hedge funds. (Reporting by Svea Herbst-Bayliss; Editing by Bernard Orr)