Teacher Retirement System of Texas, Austin, returned an annualized 17.8% in the three years ended March 31, helping lift fund assets to $110.3 billion.
The retirement system had annualized outperformance of 1.6% over the system's internal private equity benchmark over the three-year period, according to a report by T. Britton Harris IV, chief investment officer, presented to the board of trustees earlier this month.
Mr. Harris noted in his report that the teachers' fund had benefit payments of $8.4 billion during the three years.
The three-year return placed Texas Teachers second on a risk-adjusted basis among 66 U.S. public pension funds with more than $1 billion in assets, according to analysis by the board's consultant, Hewitt EnnisKnupp.
Texas TRS was among the top 15% of pension funds with more than $10 billion under management, according to the Wilshire Trust Universe Comparison Service, Mr. Harris' report noted.
The system's best-performing asset classes for the three years ended March 31 were REITs, 41.7%; global small-cap equity, 29.7%; emerging markets equity, 24.8%; and global large-cap equity, 23.8%, according to Mr. Harris' report. All returns are annualized.