Texas OKs Doubling Of Teachers' Pension Hedge Fund Allocation

Aug 1 2011 | 12:36pm ET

Texas has given its teachers' pension plan the freedom to invest up to 10% of its assets in hedge funds.

The state Legislature passed and Gov. Rick Perry signed last month the law giving the Teacher Retirement System of Texas the new authority. The $108 billion system had lobbied for the change, saying that the added flexibility could have helped it avoid more than $30 billion in losses during the financial crisis.

Prior to the new legislation, TRS was authorized to invest no more than 5% of its assets in hedge funds.

The law "puts another tool in the chest" of TRS' managers, state Rep. John Otto, one of its sponsors, told the Financial Times.

"I think there is a place for hedge funds if they are used properly and not used as a leveraging risk, as opposed to a leveraging against risk."


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...