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

Royalties: The Alternative Assets of the Music Industry

Jul 8 2016 | 7:01pm ET

Recent market volatility has investors seeking greater insight into alternative...

Lifestyle

Moore Capital PM Fired After Raucous Hamptons Party

Jul 7 2016 | 10:47pm ET

A portfolio manager for Louis Bacon’s $15 billion hedge fund Moore Capital Management...

Guest Contributor

MPI: Like Stellar Returns? Better Understand the Risks First

Jul 22 2016 | 8:44pm ET

When the press reports extraordinarily strong relative or risk-adjusted returns...