Units are purchased on quarterly buy-in dates of March 1, June 1, September 1, and December 1. Funds wired to UTIMCO prior to a quarterly purchase date are immediately invested in a money market account until LTF units can be purchased. Interest earned on the money market account during the interim period is distributed to the UT System institution of record.

UTIMCO's large asset base allows for economies of scale in the management of the endowment funds. UTIMCO incurs expenses associated with strategy and analysis, portfolio management, custody and safekeeping, accounting and other investment related functions. The GEF was created as the investment vehicle in which the LTF and PHF could get cost effective exposure to a well diversified investment portfolio. Both the LTF and PHF pay the same fee for every unit of GEF owned by these Funds. However, there are additional expenses which differ for the LTF and PHF. Therefore, the total fee paid by each unit of the LTF includes LTF expenses plus a portion of the GEF expenses. The UTIMCO fee for 2005 fiscal year was 0.06% of LTF average net assets; fees and expense paid to external managers and other service providers totaled 0.26% of LTF average net assets.

The LTF is also assessed an annual administrative fee on behalf of UT System institutions for the support of enhanced and expanded endowment compliance, and an annual fee to cover costs associated with UT System personnel and UT System consultants in their oversight responsibilities of UTIMCO. In addition, the LTF is assessed an education fee by UT System. The compliance, oversight and education fees for 2005 were 0.10% of LTF average net assets.

Compensation for top UTIMCO staff members is a combination of base salary and a performance-based bonus. Base salaries are set at the median level for similar job functions in a universe of endowments, foundations, and private investment management firms constructed by our compensation consultant, Mercer Human Resource Consulting. Bonuses are based on investment performance. In order to earn full performance bonuses, a staff member must produce above benchmark level returns in the asset class for which the member has responsibility, the overall UTIMCO performance must exceed 75% of all endowment funds larger than $1 billion in assets, and the staff member must meet all predetermined qualitative performance goals. At maximum performance levels, total compensation for a staff member will equal the 75 percentile of compensation, for a comparable position, in the universe created for UTIMCO by Mercer. If performance goals are not met, no performance bonuses are paid. All elements of staff compensation at UTIMCO are defined in the UTIMCO Compensation Plan that was approved by the UTIMCO Board and the UT Board of Regents.

UTIMCO provides a variety of reports and services, including an annual report and a LTF report. Individual donor statements are available to UT System institutions via UTIMCO's website at www.utimco.org. UT System institutions may also obtain daily individual account information via the Component Reporting Information System (CRIS), also accessed through the UTIMCO website.