Texas Teachers' Portfolio

This week we’ll look at the portfolio for the Teacher Retirement System of Texas (TRS). TRS was founded in 1937 to provide a retirement system for Texas public educators. In its first year of existence, TRS managed $2.5 million on behalf of 38,000 educators. Times have certainly changed since 1937:

In the 87 years since, TRS has grown to become one of the largest retirement plans in the country, managing over $211 billion on behalf of more than two million members as of 9/30/2024.  

The pension has been run by CIO Jase Auby since 2019, who joined the organization in 2009. As of Q3, TRS has outperformed its benchmark during every lookback period since 1991. In the second quarter of 2024, TRS recorded one of the best quarters in its history – 333 basis points of alpha – driven by US and Indian equities.

In July 2024, TRS approved a few notable changes to its Strategic Asset Allocation (SAA). Among the changes was a new 6% overall allocation to inflation-linked bonds (TIPS), a plan to reduce private equity exposure by 2%, and removing China completely from the pension’s benchmarks.

TRS Asset Allocation Detail:

For most of its history, TRS was prevented legislatively from hiring external managers. This changed in 2008 when former CIO Britt Harris launched TRS’ Strategic Partnership Network, awarding four initial asset management firms with $1 billion mandates each. Since then, TRS’ external manager relationships have grown to more than 200 disclosed partners as of 8/31/24, which OWL users can see on our platform. As a reminder, OWL’s allocator data now includes the manager holdings of the largest pensions in the US. We have mapped over 24,000 individual investments into managers for these pensions, with more being added each week.

One of TRS’ disclosed manager relationships is with The WindAcre Partnership. WindAcre was founded in 2013 by Snehal Amin, who was previously a founding partner at TCI alongside Chris Hohn, as well as a partner at Theleme, where he worked with former UK prime minister Rishi Sunak. Amin founded WindAcre on the belief that “concentrated stock-picking within a universe of good businesses, and with an owner-oriented and independent mindset, can generate attractive returns over time and across cycles.” OWL users can see several other endowments, foundations, and pensions that are invested with WindAcre on the OWL platform. 

Amin has a history of taking large positions in his highest conviction ideas. In 2022, he put roughly one-third of WindAcre’s assets into Nielsen in an attempt to block a take-private bid from a PE consortium led by Elliott. At TCI, he also led a proxy campaign alongside 3G Capital against CSX in 2008, culminating in winning four board seats. OWL users can see WindAcre’s entire disclosed portfolio on the site, as well as our estimated returns and other portfolio analytics.

OWL users received a more detailed version of this newsletter, including a roster of managers for TRS. If you’d like more info, reach out!

Other News & Events

• WashU returned 8.7% for FY24 

• Interview with Abigail Wattley, Williams College CIO

• UConn is shifting toward ETFs and away from hedge funds

• University of Michigan has cut back on new investments in private funds

• Texas governor ordered state entities to divest China investments 

• Article on the growing number of women leading family offices 

• Point Olema Capital has raised $200 million for a PE fund of funds 

• YMCA Retirement Fund is hiring a Managing Director for public equities 

• State of Michigan Retirement System is hiring a senior investment manager for VC 

• University of Michigan is hiring an investment analyst

• Podcast with Micky Malka on building Ribbit Capital

• Podcast on how Loyola University invests

• Podcast on how the Visa Foundation invests

About Old Well Labs

OWL is an intelligence platform built for allocators, by allocators. Leading endowments, foundations, and family offices use the system to find, monitor, and connect with thousands of fund managers globally. OWL's analytics engine has collected over one billion data points from 65 countries. We make it easy for allocators to find and track information about the managers they care about – not just positions but also performance analytics, people data, business information, and details about the manager investments of other allocators.

Disclaimers

Returns represent the return on invested capital of publicly disclosed long positions, as calculated by OWL. Actual returns may vary based on a number of factors, including (but not limited to) undisclosed positions, short exposure, non-equity holdings, cash holdings, and lagged disclosure of positions.

This newsletter and the material on the Old Well Labs platform are for informational purposes only and should not be considered investment advice or a recommendation of any particular security, manager, or strategy. Old Well Labs shall not be liable for any investment gain or loss that may occur from the use of this material. No part of this material may be reproduced in any form or used in any publication without express written permission from Old Well Labs.