Back in 2011, the University of Texas followed the advice of one of its wealthiest alumni, Kyle Bass. The University increased its holding of gold to $1 billion in gold bars in a New York vault back in April 2011, when gold was trading at $1,486 an ounce. Now the University has begun to convert that stake into gold futures.Kyle Bass

According to a report in Bloomberg, The University of Texas fund sold around $375 million of gold bars. However, the University reinvested the money in gold futures and in equities. The University of Texas fund made the trade in the three months leading up to February 28, meaning that it avoided the large fall in the price of gold earlier in April.

According to a source close to the matter, the University still has the same exposure to gold because their investment in gold futures is leveraged. The value of the gold investments held by the fund now stands at around $1.1 billion.

A source close to the matter from the fund indicated that the vehicle still maintains the same level of exposure to gold and moved to gold futures in order to free up cash to invest in equities. The person also stated that it began investing in gold in the Fall of 2008 and through 2009, before Kyle Bass joined the board.

We listed Kyle Bass as one of the biggest losers from the April two day gold crash, pointing to his own investments in the metal, and his advice to the University of Texas to do the same. That, and all other coverage of the crash, may have been premature. Spot Gold Prices rose to above $1,450 today, their highest level in ten days.

According to Bass, the reason that gold is such a good investment is the logical conclusion of central bank practices in the last five years. Because of the rampant money printing, inflation, according to Kyle Bass, is bound to happen. That means the price of gold will inevitably rise. Kyle Bass has made bold predictions, in the past, and not all of them have worked out.

In the twelve months before the University disclosed that it had sold off the $375 million portion of its gold bars, the metal lost 12 percent of its value.

The University of Texas Investment Management Company is the second largest University endowment in the United States. The fund manages around $30 billion in assets for the University of Texas, and is second only to Harvard University in the magnitude of its stake.

2:30 EST: A previous version of this article implied that the University of Texas had reduced its exposure to gold and that this represented a change to the  relationship between the University Fund and Mr. Bass. The article was changed to reflect the unchanged exposure the University Fund has to gold.