The Permanent University Fund (PUF) is a public endowment that provides financial support to institutions in The University of Texas and Texas A&M University systems. The PUF was established in 1876 by the Texas Constitution, and the income is derived from revenue generated from public land provided by the state of Texas.

The land is located primarily in Reagan County in West Texas, where for decades the climate was unsuitable for agriculture and the property was of little commercial value. The income produced was mainly from modest grazing leases.

But then on May 28, 1923, oil was discovered on the land, and the PUF quickly became one of the most profitable university endowments in the country. Oil revenues in 1925, for example, increased to nearly $4 million and were growing by $2,000 a day.

The PUF has continued to support higher education in Texas throughout its colorful, sometimes controversial, history. For more than a century the fund has survived political wrangling, disputed investment strategies, the collapse of oil prices, and a broader redistribution of the monies.

In 1996, The University of Texas Investment Management Company (UTIMCO), a non-profit private investment corporation, began to manage the PUF. UTIMCO has been able to increase the flexibility of the investments, to respond quickly to emerging markets and technological innovation, and to apply the latest, most effective management principles in the industry.

The PUF principal in the fall 2000: $10 billion. Second only to Harvard's endowment.

The difference? The PUF serves 15 Texas universities with larger student bodies.

At one time, the PUF was the chief source of income for The University of Texas at Austin. Today its revenues account for less than 10 percent of UT's annual budget. This has challenged the University to increase sponsored research and private donations.

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