Texas Permanent School Fund, Austin, could begin a search early next year for a commodities manager to run about $685 million if approved by the Texas State Board of Education, which oversees the $22.8 billion fund.
The search was recommended Wednesday by the Committee on School Finance/Permanent School Fund after Holland Timmins, the permanent fund's executive administrator and chief investment officer, asked to seek a manager to run half of the fund's 6% real return allocation in long-only or long/short commodity investments, according to a live webcast of the committee meeting.
Earlier this year, the board gave permission for fund staff to internally manage the other 3% of the real-return allocation in Treasury inflation-protected securities.
Mr. Timmins told committee members that if the commodities search is approved, an RFP will be posted on the fund's website on Jan. 26 and a manager will be selected next July.
Separately, the finance committee recommended that the full board approve commitments to two real estate funds, part of the expansion of the fund's $1.5 billion total allocation to the asset class. If approved by the full board, the fund will commit up to $75 million to TA Associates Realty Fund X, a value-oriented fund, and up to $50 million to Oaktree Real Estate Opportunities V Fund, an opportunistic fund.
The fund's total real estate investments and commitments will total $830 million if the two new investments are approved, according to the webcast.
Also, discussion about a staff-driven proposal to create strategic partnerships for direct investments in hedge funds with some of its five existing hedge fund-of-funds managers was tabled until the finance committee reconvenes Thursday. Mr. Timmins did not identify the fund's existing hedge funds of funds, but noted the aggregate portfolio totals $2.5 billion.
Texas Permanent returned -9.34% in the third quarter, according to the webcast.