✦ TL;DL
In brief: The Texas Teachers Retirement System is making significant adjustments to its $213B portfolio, reducing emerging market exposure and private equity allocation while increasing focus on stable, developed markets and improving liquidity management. They deep dive on real estate.
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Executive brief
We've analysed over 22 conversations, these are the main insights and key takeaways:
We've analysed over 22 conversations and come up with these possible action points:
Investment committee meeting outline
CIO update
1 Year Performance: The Trust's 1-year performance as of Q1 end was 9.4%, including 298 basis points of alpha, which is a record 1-year alpha for the Trust.
3 Year Performance: The 3-year return was 5.5%, with 179 basis points of alpha.
Fiscal Year Estimate: As of June 30, the estimated fiscal year return is 9.3%.
RSPN Summit: Discussions included AI, value stocks, emerging markets, and Europe.
Industry Initiative: An initiative to advocate for cash hurdles in hedge fund returns was launched. The proposal has 60 signatories, up from 29 initially.
Work from Home Adjustments: The IMD adjusted work-from-home arrangements to Tuesday, Wednesday, and Thursday, shifting from a 3:2 schedule with a mandatory Monday.
Semi-Annual Reviews: Semi-annual fireside chats and portfolio reviews were conducted, focusing on public and private markets, respectively.
Q1 2024 performance review by Aon
Private Markets Annual Update
Adoption of 1 or 30 Hedge Fund Structure: Approximately two-thirds of TRS's assets under management and hedge fund managers have adopted the 1 or 30 fee structure, indicating a significant shift towards more favorable fee terms.
Overview of Private Markets
Transparency and Innovation: Emphasis on transparency with partners and trustees, innovative investment models, and industry leadership within the team.
Team Composition and Portfolio Overview: Four teams with offices in London and Austin, managing 745 active investments. The private markets portfolio represents 38% of the trust, totaling $80 billion, with 7,100 holdings across various sectors.
Performance Metrics: As of 12/31/2023, private markets have consistently delivered around 11% return since inception, with E and RI and PE showing positive 1-year IRR, but real estate had a negative return for the first time in 14 years.
Top quotes
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A quorum is present. K.
We have before us the proposed minutes of the May 2024 Investment Management Committee meeting. Are there any recommended changes to the minutes as presented?
— Chairman Corbis
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We discussed artificial intelligence, the value factor and investing in value stocks, emerging markets investing, as well as Europe.
0:02:36 ⏵
— Chase Avi
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But anyway, long time partner with the firm. It's been, it'll be 18 years next week. It's been 6 years since I've worked with you all, and I'm very excited to be back.
— Speaker 12
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