By British standards, if not those of the US, the University of Oxford is a very rich institution. But the majority of its wealth is held by its colleges.

Oxford's total endowments exceed ?3 billion, of which ?680 million is held centrally and ?2.7 billion managed by the colleges.

That distribution may be about to change as the recently created and centrally controlled Oxford University Asset Management (OUAM) gets into gear.

One college has already transferred ?100 million into the central fund, and the university wants others to follow suit, with the aim of building a much larger pot of cash and, in turn, improving the overall rate of return.

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A spokeswoman said: "The aim is that colleges are able to put some of their endowments into the pot, and as this starts the investment office will be able to demonstrate that it is managing that money well and getting good returns.

"If that happens, the colleges may think this is what they should be doing with their money."

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While the collegiate system helps to draw in donations, the fact that Oxford's endowment is fractured, unlike the far wealthier Ivy League universities, may be its weakness.

Michael Moritz, a multi-millionaire venture capitalist, donated ?25 million to his alma mater, Christ Church, on the condition the college move ?100 million to the OUAM.

"He has a belief, as the university does, that the corollary of asking people for lots of money is you have to manage it well and maximise what you are getting out of that money," the university spokeswoman said.

The OUAM was set up after a review by the university council into its fund management, led by Sir Alan Budd, the economist and former provost of Queen's College.

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David Barnes, head of the education for business consultancy Grant Thornton, said the economies of scale it could enjoy might attract other colleges to the OUAM, although he said there was a lot of organisation involved in putting such a scheme together.

"You have to persuade people to take part, which is probably where someone like Mr Moritz comes in," he said. "By their nature, colleges will be risk averse; they have their money, it is secure and they can be sure they can get hold of it. Passing it over to a third party is not something many governing bodies will find easy to make a decision on."