Texas Permanent School Fund Says Goodbye To Fund-Of-Funds Approach

Nov 22 2011 | 10:20am ET

The $22.8 billion Texas Permanent School Fund, Austin, will allocate its $2.5 billion hedge fund portfolio through strategic partnerships, abandoning the fund-of-funds approach it has used to date.

The fund will consider how to choose those partners during the January 25-27 meeting of the Texas State Board of Education, which oversees the Permanent School Fund on behalf of the Texas Education Agency, Austin, reports Pensions & Investments.

Patricia Hardy, chairwoman of the committee on school finance/permanent school fund, told a board meeting on November 18 that the permanent fund’s finance committee will likely recommend strategic hedge fund partners during the board’s April 18-20 meeting.

P&I says the suggestion was made that some of the fund’s five current fund-of-funds managers could become strategic partners, but Hardy did not specify whether the selection process would be limited to existing managers or involve an open RFP.

The fund currently allocates to Grosvenor Capital Management ($770 million), Blackstone Alternative Asset Management ($637 million), K2 Advisors, ($380 million), GAM USA ($328) million and Mesirow Advanced Strategies ($317 million), Suzanne Marchman, spokeswoman for the Texas Education Agency, told P&I.

The move is expected to save the Permanent School Fund about $114 million in fees over the next five years. The fund has paid $72 million in hedge fund-of-funds fees since inception of the absolute-return portfolio four years ago.


In Depth

JOBS Act Propels Real-Estate Crowdfunding Platform

Oct 21 2014 | 2:57am ET

If D.J. Paul were a real estate development, he would be described as “multi-use...

Lifestyle

MacDonald-Korth Offers Insights Into Paintings Bought, Sold By Hedgies

Oct 7 2014 | 9:00am ET

Definitive and complete ratings require an in-person examination of an artwork,...

Guest Contributor

PAAMCO: European Equity Exposure - Challenging Year, But All is Not Lost

Oct 16 2014 | 4:12am ET

European equity hedge fund managers have had a tough time so far this year. The...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.