The Texas Permanent School Fund's decision to dump funds of hedge funds in favor of direct investing hasn't proved a disaster for its funds of funds—not all of them, anyway.
In fact, two of them will be overseeing even more under the direct plan than they do now. The $24 billion endowment will ask Blackstone Alternative Asset Management and Grosvenor Capital Management to handle "strategic partnerships" that will handle the Permanent fund's $2.5 billion hedge fund portfolio. Currently, Blackstone manages $637 million and Grosvenor $770 million for the fund.
The other funds of funds currently running just over $1 billion for the Permanent Fund are not so lucky: They're to be terminated.
The plan, which could save the Permanent fund some $35 million in fees over the next five years, now goes to the Texas state Board of Education. The board will consider it tomorrow.