US - The Teacher Retirement System of Texas has agreed to issue $6bn combined to Kohlberg Kravis Roberts and Apollo Global Management expanding its strategic partnership programme to the private markets.
Each private equity firm will run up to $3bn and will have the discretion to run mandates which span the private markets. The managers are given a wide amount of investment latitude, and TRS receives increased risk control and a customised fee structure.
Steve LeBlanc, senior managing director, external private markets at Texas TRS said the "decision is the culmination of a multiple year effort to create a private markets partnership platform that will support the needs of TRS and its beneficiaries. Over the last three years, we have implemented similar partnerships in public markets, and they have been very successful.
"These strategic partnerships enable us to work closely with a small group of top tier managers and they allow us to take advantage of the best global investment opportunities."
The launch of the scheme's so-called Strategic Partnership Network in April 2008 was believed to be the first time a US public pension plan had teamed up with asset managers in such a way.
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