Texas May OK Doubling Of Teachers' Hedge Fund Investments

Mar 17 2011 | 12:10pm ET

Texas lawmakers are considering a bill that would give the state's teachers pension plan the ability to more than double its hedge fund allocation.

A bill before the state Legislature would allow the Teacher Retirement System to invest up to 10% of its assets in hedge funds, up from the 5% level set four years ago. According to the $108 billion pension, if the system had been able to invest so much in hedge funds before the financial crisis, it would have been able to stem its losses: TRS saw its portfolio fall from $112 billion to less than $80 billion between 2007 and the beginning of 2009; CEO Ronnie Jung said that its 4% hedge fund allocation saved the pension nearly $1 billion.

"If we'd had more authority, we would have saved more money," Jung told a Legislature committee.

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