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Searching far for deals

Texas Teachers looks to get ‘boots on ground’ in Singapore

Texas Teachers wants to open an office in Singapore to be closer to money managers and deals.

The Far East beckons the Teacher Retirement System of Texas, Austin, which, like many an explorer, is in search of fabulous riches.

Because about 15% of the $151.4 billion pension fund already is invested throughout Asia, the investment staff wants to get "boots on the ground" in the region to gain insight into local markets and get to know money managers, said Brian Guthrie, executive director. An investigative squad vetted Asian cities last month and Singapore was tentatively selected as the office location.

"It's a long, costly journey to send people to do due diligence on money managers in Asia," Mr. Guthrie said, noting that the great success of the pension fund's London office, which opened in 2015, prompted the team to research setting up a second overseas outpost.

The pension fund's private markets team is tasked with investing more in co-investments in the U.S. and other regions and set up the London office to be closer to European and U.K. money managers generating deal flow.

Proximity worked: Mr. Guthrie said since the London office opened 2 years ago, TRS was shown co-investment deals in the U.K. and Europe totaling $18 billion.

"Our staff was able to invest in five major deals as a direct result of being in London," Mr. Guthrie said, adding that the hope is that proximity will help TRS see strong deal flow across the region.

The proposal for the new office will be presented to the board at its July 26 meeting. If the idea receives board approval, Mr. Guthrie will introduce the plan to the Texas Legislature to get approval during the next session, which begins in January.

If all goes well, Mr. Guthrie said the plan will be to open the Singapore office in midsummer 2019, initially staffed with three or four people from the pension fund's Texas headquarters, with local employees added over time.