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Investments

Investment Policy

January 1, 2019 (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

Most Recent Investment Reports

Investment Reports Archive

2017 Investment Reports
2016 Investment Reports
2015 Investment Reports
2014 Investment Reports
2013 Investment Reports
2012 Investment Reports
2011 Investment Reports

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.

2010 Investment Reports
2009 Investment Reports
2007/2008 Investment Reports

Asset Allocation

(Allocations shown may not sum up to 100% exactly due to rounding.)

Asset Allocation

Asset Allocation as of 12/31/2019 — 36.70% Global Equities, 11.9% Core Fixed Income, 18.70% Non-Core Fixed Income, 11.00% Real Return, 8.50% Real Estate, 8.7% Absolute Return, 2.90% Private Equity, and 1.70% Unallocated Cash.
Strategic Target Allocation

Update: In accordance with the IPS (effective 1/1/2019), US Equities and Non-US Equities asset classes have been combined into the Global Equities asset class.

At its meeting on September 26, 2019, the TMRS Board approved a new portfolio target allocation to be effective January 1, 2020: 30% Global Equity, 10% Core Fixed Income, 20% Non-Core Fixed Income, 10% Real Return, 10% Real Estate, 10% Absolute Return, 10% Private Equity.

At its meeting on July 30, 2015, the TMRS Board approved a new portfolio target allocation: 35% Global Equity, 10% Core Fixed Income, 20% Non-Core Fixed Income, 10% Real Return, 10% Real Estate, 10% Absolute Return, 5% Private Equity.

Investment Advisors

Custodian and Bank

Custodian • State Street Bank and Trust Company

Depository Bank • JPMorgan Chase Bank

Investment Consultants

Traditional Asset Classes • RVK

Absolute Return and Real Return • Albourne America, LLC

Real Estate • StepStone Group, LP

Private Equity • StepStone Group, LP

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