Investments



Investment Policy

December 2016 (pdf)


Guiding Principles

Guiding Principles The overall objective of TMRS’ Investment program is to ensure that members, retirees, and beneficiaries are provided the benefits they have been promised by their employers at a reasonable and predictable cost to the employers. Assets will be invested with a total return posture, given appropriate consideration for portfolio volatility (risk) and liquidity. Total return includes dividends, interest, and realized and unrealized capital appreciation.

General Objectives

TMRS investments are held in trust for the exclusive benefit of members and invested under the provisions of the TMRS Act. The investment statutory guidelines for TMRS are found in the Texas Government Code, Sections 855.301 through 855.303.

Investments are made with the degree of judgment and care, under the circumstances, that persons of prudence, discretion, and intelligence exercise in the management of their own affairs, considering the probable income from the securities and probable safety of their capital and in consideration of the purposes, terms, distribution requirements, and other circumstances of the trust. Investment and management decisions respecting individual assets will be evaluated not in isolation but in the context of the investment portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.


Investment Reports



Investment Reports Archive


2011 Investment Update

In 2011, TMRS continued implementing the following strategic target allocations which were adopted by the Board in June 2009, with implementation to occur over a multi-year period (see pie charts.)

There were several initiatives during 2011 aimed at continuing our progress toward the target allocations, including monthly commitments to U.S. and international equity index funds.  By the end of 2011, the equity target allocations were met with 40% of the fund invested in passively managed equity index funds (20% in domestic equities and 20% in international equities). TMRS began funding its real estate target allocation by committing $200 million to real estate limited partnerships and funding $97 million.  With the assistance of TMRS’ real estate consultant, ORG, TMRS will continue to seek out and fund additional real estate investments over the next few years in order to meet its 10% target.  In addition, TMRS funded its 5% target allocation to the real return asset class through investment in global inflation-linked bonds.  Assets allocated to fixed income managers totaled 54.2% and will gradually move to the 35% target allocation as fixed income funds other asset classes. 

The Board will continue to authorize implementation to the strategic target allocations in stages. To ensure that the risk tolerance remains appropriate, the target allocations will be reviewed at least annually for reasonableness relative to significant economic and market changes or changes to the Board’s long-term goals and objectives.

2011 Returns

The overall one-year rate of return on the $18.5 billion investment portfolio was 2.41% with fixed income the best performing asset class, earning 7.99%, while the return on equities was 1.03% domestic and -13.35% international.


Asset Allocation


Asset Allocation

Asset Allocation as of 6/30/2017 — 21.54% US Equities, 17.77% Non-US Equities, 18.10% Core Fixed Income, 13.91% Non-Core Fixed Income, 9.14% Real Return, 8.41% Real Estate, 9.75% Absolute Return, 0.65% Private Equity, and 0.73% Unallocated Cash.
Strategic Target Allocation (At its meeting on July 30, 2015, the TMRS Board approved a new portfolio target allocation.) — 17.5% US Equities, 17.5% Non-US Equities, 10% Core Fixed Income, 20% Non-Core Fixed Income, 10% Real Return, 10% Real Estate, 10% Absolute Return, 5% Private Equity.

Investment Advisors


Custodian • State Street Bank and Trust Company

Depository Bank • JPMorgan Chase Bank

Traditional Asset Classes • RVK

Absolute Return and Real Return • Albourne America, LLC

Real Estate • Courtland Partners, Ltd.

Private Equity • StepStone Group, LP

Equities

  • Acadian Asset Management, LLC
  • Champlain Investment Partners, LLC
  • Epoch Investment Partners, Inc.
  • Lazard Asset Management, LLC
  • Northern Trust Investments, N.A.
  • SASCO Capital, Inc.
  • State Street Global Advisors
  • The Boston Company Asset Management, LLC
  • UBS Global Asset Management Trust Company
  • Wasatch Advisors Inc.
  • Wellington Management Company, LLP
  • William Blair & Company, LLC

Fixed Income

  • BlackRock Financial Management, Inc.
  • Pacific Investment Management Company, LLC

Non Core Fixed Income

  • Adams Street Private Credit Fund-A, LP
  • Alliance Bernstein, LP
  • Bain Capital Credit LP
  • Beach Point Total Return Master Fund, LP
  • BlueBay Asset Management, LLP
  • Columbia Management Investment Advisors, LLC
  • Ellington Management Group, LLC
  • GoldenTree Asset Management, LP
  • Golub Capital PEARLS Direct Lending Program, LP
  • Guggenheim Partners Investment Management, LLC
  • H.I.G. Whitehorse Capital, LLC
  • Highland Capital Management, LP
  • Marathon CLO Equity Fund, LP
  • Marathon European Credit Opportunity Fund III, LP
  • Marathon Structured Product Strategies, LP
  • Neuberger Berman Investment Advisors, LLC
  • PIMCO COF II, Fund
  • TCW Asset Management Company
  • Voya Investment Management Company, LLC
  • Waterfall Eden Fund, LP
  • White Oak Summit Fund, LP

Private Equity

  • Altaris Constellation Partners IV, LP
  • Altaris Health Partners IV, LP
  • Capital Partners Private Equity Income Fund III, LP
  • Carlyle Energy Mezzanine Opportunities Fund II, LP
  • Foundry Group Next Fund, LP
  • FTV V, LP
  • GSO Capital Opportunities Fund III, LP
  • GTCR Fund XII, LP
  • Harvest Partners VII, LP
  • H.I.G. Bayside Fund IV
  • Incline Equity Partners IV, LP
  • Kainos Capital Partners II, LP
  • Marlin Equity V, LP
  • Marlin Heritage II, LP
  • Mercato Partners Growth III, LP
  • One Rock Capital Partners II, LP
  • Providence Strategic Growth II, LP
  • Searchlight Capital II, LP
  • TPG Tao Special Situations Partners
  • Tritium I, LP
  • Updata Partners V, LP

Real Return

  • Actis Energy IV, LP
  • AMERRA Agri Fund III, LP
  • Blue Sky Strategic Australian Agriculture Fund, LP
  • Brookfield Infrastructure Fund III, LP
  • Cohen & Steers Capital Management, Inc.
  • Colchester Global Investors
  • ISQ Global Infrastructure Fund II, LP
  • MTP (Magnetar) Energy Opportunities Fund II, LLC
  • Nuveen Asset Management LLC
  • Orion Mine Finance Fund II, LP
  • Sprott Resource Lending Fund, LP

Absolute Return

  • Alyeska Fund, LP
  • BG Umbrella Fund Plc BD Fund
  • Blackstone Alternative Asset Management, LP
  • D. E. Shaw Valence Fund, LLC
  • DSAM Long/Short Equity Fund, LP
  • East Lodge Capital Credit Opportunities Fund, LP
  • Field Street Partners, LP
  • Graticule Asia Macro Fund, LP
  • H20 Alpha 10 Feeder Fund (US) LP
  • Man AHL Hydrogen, LLC
  • Myriad Opportunities US Fund Limited
  • PDT Mosaic Offshore Fund, Ltd.
  • Pharo Gaia Fund, Ltd.
  • Red Cliff Asia Fund
  • Redmile Capital Fund, LP
  • River Birch Partners, LP
  • Roystone Capital Partners, LP
  • Southpoint Qualified Fund, LP
  • Varde Investment Partners, LP

Active Real Estate

  • Abacus Capital Group, LLC
  • Alcion Real Estate Partners Fund III-B, LP
  • Blackstone Property Partners, LP
  • DivcoWest Fund V, LP
  • Greenfield Partners, LLC
  • H/2 Credit Partners LP
  • H/2 Core Real Estate Debt Fund LP
  • Harrison Street Real Estate Capital, LLC
  • IC Berkeley Partners IV, LP
  • Invesco Advisors, Inc.
  • Kildare European Partners II, LP
  • Lubert-Adler Management Co., LP
  • Miller Global Properties, LLC
  • Moorfield Real Estate
  • Rubenstein Partners, LP
  • Rubenstein Properties Fund II LP
  • Stockbridge Real Estate
  • Torchlight Debt Opportunity Fund V, LP
  • TPG Real Estate Partners II LP
  • Tristan European Property Investors Special Opportunities 4 LP
  • USAA Eagle Real Estate Feeder I, LP
  • Walton Street Capital, LLC

*TMRS does not currently have investments in all of the active funds listed.


Contacts for Investment Managers


Thank you for your interest in the TMRS investment program.  Firms or persons interested in contacting TMRS regarding investment opportunities should contact the appropriate team listed below:  

TMRS conducts manager searches with the assistance of the following general and specialty consultants; be sure to remain current on these consultants’ respective databases.

  • Traditional Asset Classes
    • RVK
  • Absolute Return and Real Return Consultant
    • Albourne America LLC
  • Real Estate Consultant
    • Courtland Partners Ltd.
  • Private Equity Consultant
    • StepStone Group LP