This paper examines “ownership” arrangements for Tertiary Education Institutions (TEIs) in New Zealand, taking funding and regulatory arrangements as given. It argues that these institutions are in effect non-owned, and hence TEI ownership should better be understood as how these institutions are governed. Key features of TEIs are their reliance on specialised staff, the bundling of teaching and research activities (varying across TEI types), faculty making specialised co-investments with funders and each other, and international competition for faculty, students and research funding. They also include TEI quality being hard to measure (and hence reliance on professional ethics – e.g. academic integrity), and students enjoying subsidies for the cost of their studies (in part due to public benefits from private study investments). TEI governance arrangements are summarised and placed in context. This includes comparisons with university governance arrangements internationally, but also with other organisation types. We show that TEIs share certain key features with professional service firms, but that such firms involve a significantly lower degree of specialised investment in non-human capital. This limits the relevance of their governance arrangements for TEIs. Team production theory is also explored, since it applies in situations where different parties must make specialised co-investments, the value of which hinges on the investments made by their counterparts. This is particularly relevant for university research where faculty make specialised human capital investments that depend on specialised co-investments in non-human capital (e.g. specialised labs) which are affected by funding decisions (e.g. by government). In such situations governance by a disinterested “mediating hierarch” – and not by either faculty or funders – is most efficient. Even closer parallels emerge from comparisons of TEIs with health sector organisations. We find that multiple and coexisting forms of governance (including for-profit and not-for-profit) arise in health sector organisations. These reflect differences in the scale and specialisation of non-human capital coinvestments. We conclude that the current “one size fits all” governance regime applied to TEIs is likely to be inefficient, and that different forms are likely to better suit different TEI types, and even different activities within TEI types. These inefficiencies affect government’s risk as the leading funder of TEIs. It also lead to distortions in TEI performance, which is affected by the overall interaction between governance, contracting and regulatory arrangements.