- Why this is important: Emerging managers has become a major part of the system’s allocation strategy
Teacher Retirement System of Texas hired Kirk Sims from Illinois Teachers Retirement System to lead its emerging manager program.
The $150 billion Texas Teacher pension has an active emerging manager program, with $3.7 billion committed since inception, and another $2.1 billion invested with firms that had graduated from the EM Program, including Vista Equity Partners. The pension launched an “Emerging Managers 3.0” initiative in 2018, and plans to commit more capital to both early-stage emerging managers and promising firms that have outgrown the emerging manager program.
Sims worked for Illinois TRS since 2013, where he oversaw a $7 billion minority investment program and a $750 million emerging manager program, which made investments across all asset classes. Sims will oversee Texas Teacher’s $5.7 billion dollar emerging manager program as well as the $3 billion allocated to the Emerging Manager 3.0 Program.
CIO Jerry Albright said Texas TRS went through 170 applications before choosing Sims.
“The final decision was that he liked to fish, and loved music, so we knew we had him on the hook in Austin Texas, land of the lakes and home of the music capital of the world,” Albright said at the pension’s February board meeting.
Board chair Jarvis Hollingsworth said the emerging manager program continues to bring investment talent to Texas TRS and has “burnished our brand in the industry.”
Hollingsworth thanked Sylvia Bell, who has run the emerging manager program since 2015 while also serving as COO of the pension fund’s investment management division. TRS’ Deputy Chief Investment Officer Jase Auby and GCM Grosvenor, TRS’ private markets partner in the emerging manager program, also praised Bell’s recent work on the program.
The emerging manager program aims to outperform the main portfolio, give opportunities to diverse managers and identify firms that can graduate into the main TRS portfolio, Bell said that the meeting.
“First and foremost, it’s performance,” Bell said. “We’ve outperformed pretty significantly in this program, largely led by real assets and by private equity.”
Action Item: View Texas TRS’ announcement of its “Emerging Manager 3.0” plans: https://bit.ly/2Nqfax2