TCDRS outlines revised investment policy for 2021

The US public pension has adopted a revised investment policy, providing new guidelines for co-investment vehicles.

Institution: Texas County and District Retirement System
Headquarters: Austin, US
AUM: $38.1 billion
Allocation to alternatives: 50.9%

Texas County & District Retirement System has approved a revision to its existing investment policy following the pension’s June board meeting.

Private equity-focused highlights from the revised investment policy include:

  • TCDRS’s buyout investments will focus on acquisitions, growth equity, recovery investments and special situation vehicles both domestically and abroad.
  • Venture capital investments will range from start-up seed equity to early-stage and later expansion/development stage capital for multi-regional companies.
  • Co-investments will include direct investments into companies alongside TCDRS’s existing general partner relationships. Both control and non-control positions with significant governance rights are being considered. 
  • TCDRS will not provide more than 30 percent of any given vehicle’s raised capital. The pension will also not allocate more than 10 percent of its wider private equity portfolio to any one fund opportunity.

This investment policy revision was recommended to the Board by the pension’s chief investment officer Casey Wolf following the requirement for the introduction of a co-investment programme and alongside the clarification of new benchmark calculations. Wolf became CIO in 2018, having previously served as the managing director for the pension’s hedge fund and opportunistic credit portfolio.

The $38.1 billion pension has a target allocation to private equity of 25 percent, which currently stands at 20.5 percent. In July 2021, TCDRS approved a $100 million commitment to Nautic Partners X. As of the end of H1 2021, the Austin-based pension had made a total of 20 private equity commitments, totalling more than $1.1 billion in allocated capital.

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