TMRS’s private equity portfolio annual review

Texas Municipal Retirement System publishes its 2022 plans following the most active investment period in its history.

Institution: Texas Municipal Retirement System
Headquarters: Austin, US
AUM: $34.5 billion
Allocation to alternatives: 31.5%

Texas Municipal Retirement System has proposed strategic private equity goals for 2022, following the accomplishments of 2021.

According to October’s board meeting notes, the pension fund has noticed a 45 percent reduction of US publicly listed companies. Moreover, its private equity portfolio has earned a 27 percent cash-weighted return against its public equity benchmark over a six-year period. Earlier this year, affiliate title Private Equity International reported the pension’s revised investment guidelines and sub-asset-class exposure within the asset class.

2022 Goals

2021 has been the most active investment period in the history of TMRS’s private equity portfolio. Over $1.2 billion of commitments has been allocated across 16 different vehicles. The pension plans to commit a further $600 million across six to eight investments through year-end. Planning for 2022, the PE team aims to:

  • Allocate $900 million-worth of investments;
  • Scale-up co-investment opportunities to achieve management fee efficiency;
  • Increase co-investment and venture capital investments to maintain a comparative return performance edge.

The $34.5 billion pension has a target allocation of 10 percent which currently stands at 4.5 percent. Illustrated below are the recent fund commitments, sub-asset-class exposures and full investment portfolio breakdown.

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