Texas Teachers to hire for alternative assets division

After getting the green light to increase its alternative assets allocation from 5.5 percent to 29 percent, the Teacher Retirement System of Texas is looking to hire at least seven senior professionals to manage the expanded allocations.

The $112 billion (€83 billion) Teacher Retirement System of Texas is looking to add several senior executives for its ramped-up alternative assets staff. In a request for proposals for an executive search firm, the pension plan listed seven positions as “Priority One Searches”: a risk management director, a lead manager for internal public markets, three lead managers for external public and hedge fund strategies, a lead manager for private equity markets and a lead manager for real estate.

The RFP also said the pension plan will look for a senior manager for performance measurement, as well as managing directors in a second round of hiring. The pension plan expects to select an executive search firm by 1 September. Most of the new positions will complement existing staff, said Texas Teachers’ spokesperson Juliana Helton.

Hiring additional personnel is necessary to implement the new investment policy approved by the Texas Teachers’ board at its July meeting, said Helton. Texas Teachers plans to move up to 29 percent of its assets, or $32.5 billion, into alternatives assets, a dramatic increase from its current 5.5 percent allocation. Under the new policy, 10 percent of Texas Teachers’ assets will be allocated to private equity, up from 2.2 percent last year.

Allocations to public equities will, in turn, decline. Texas Teachers suffered a $16.2 billion net investment loss during the early part of the decade due to the stock market decline.

Texas Teachers’ chief investment officer T. Britton Harris had originally sought to allocate 35 percent of the system’s assets to alternative investments in his April proposal. Although the board ultimately decided to allocate a smaller percentage, it is still the largest allocation to alternative investments of any US public pension plan.

Harris was hired last November, before which he was chief executive officer of Westport, Connecticut-based alternative asset manager Bridgewater Associates.