NEW YORK: The University of Texas Investment Management Co. shouldn't sell the Gold Bars it bought as a hedge against inflation and financial crisis, says the director who urged the move."I'm against selling any of the gold," Kyle Bass – a managing partner at hedge fund Hayman Capital Management – told a meeting of the fund directors in Austin, Texas on Thursday.
"As every day goes by, I see deflation in the things you own and inflation in the things you need."
Last April Bass recommended and advised on the conversion to physical Gold Bars of futures contracts – which set a price for future delivery, but which are most typically settled in cash, not metal – held for the various educational endowment funds run by University of Texas Investment Management Co. (Utimco).
Initially costing $500 million in July 2010 – and worth $991.7m by the time physical Gold Bars were delivered to Utimco's custodian, HSBC Bank in New York, 10 months ago – its gold position is now valued at $1.2 billion, according to Utimco's CEO, Bruce Zimmerman.
The Gold Investment was "a hedge against lack of confidence in financial assets due to lack of government fiscal and monetary discipline," said CEO Zimmerman to Asset International's AI-CIO magazine in July 2010. Utimco had begun "laddering in" exposure to Gold Futures "over a number of months."
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