Texas public pension fund to boost alternative investments

The Texas Employees Retirement System will increase its alternative investments next year to $2.4 billion.

The system’s board agreed at its latest meeting to increase its investments in private equity, hedge fund and infrastructure portfolios.

It will commit $700 million to private equity funds in 2014, raising the system’s private equity assets from 8 percent to 10 percent of the pension fund’s assets. The Texas Employees Retirement System had a private equity portfolio of $1.5 billion as of June 30, 2013.

The board wants to invest 5 percent of the pension plan’s assets in hedge funds by the end of its 2014 fiscal year.

It also plans to create an infrastructure asset class with a 1 percent target allocation of plan assets. The retirement system already has $167 million invested in three Texas power plans and it has committed $125 million to an emerging markets power fund. The board would like to reach $235 million in infrastructure investments by the end of 2014.

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