US - The new chief investment officer at the Teacher Retirement System of Texas (TRS) has revealed plans to boost the fund's allocation in alternative assets to 30%.
T. Britton Harris, the former chief of hedge fund firm Bridgewater, said he wanted to increase the US$112bn fund’s returns by 1%, according to a report by the Wall Street Journal.
Harris said this figure could be achieved by investing in vehicles lowly correlated to stocks and bonds, thereby retaining the current level of risk.
Texan legislation has capped hedge fund allocation at 5%, which is the current figure of the fund’s overall holding in alternatives.
Coinciding with the state’s interest in the vehicle, the Texas Hedge Fund Association opened in Houston in May.
Officials said its aim was to issue information and create a networking resource for hedge fund managers and investors alike.
The organisation was set up following calls from the state’s managers that they were often left out of national debates partly due to the geographical location.
Harris previously managed the $70bn Verizon pension fund in which a 17% share of the portfolio was allocated to alternative vehicles.
Previously, TRS had unfunded liabilities of $13bn, but recent changes to the law have allowed state contributions to pull it out of deficit.
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Malcolm Mclean says getting the channels of communication right and engaging more openly is a good starting point