Refers to a person who has graduated from a university; a straightforward compound noun.
He is a university graduate and now works at a bank.
More common and concise term for 'university graduate'; 大学出の人 is a slightly more descriptive, everyday expression.
Compound of 大学 (university) + 出 (coming from) + の (possessive particle) + 人 (person), literally 'person from university'.