Texas State Board of Education committed a total of up to $150 million to two real estate managers for the $29.9 billion Texas Permanent School Fund, Austin.
Up to $100 million was committed to AG Core Plus Realty Fund IV, managed by Angelo Gordon & Co., by state education commissioners at their meeting Friday, said DeEtta Culbertson, a board of education spokeswoman, in an e-mail. The fund will invest in value-added real estate properties in large U.S. markets with a focus on high-quality office, retail, multifamily and industrial sectors.
The Texas State Board of Education oversees investment of the Permanent School Fund.
The board also committed up to $50 million to Fudo Capital III, managed by CLSA Capital Partners. The fund will seek value-added and underperforming office, retail and residential properties in Australia and Asian markets.
The managers were chosen by the Committee on School Finance/Permanent Fund at its meeting Thursday.
Including the new commitments, PSF has earmarked a total of $1 billion to 13 separate real estate strategies since the beginning of 2013, part of the fund’s buildout of its real estate portfolio, Pensions & Investments’ archives show.
Separately, the board concurred with the recommendation of the finance committee to extend BlackRock’s contract for a $5.2 billion passively managed international equity fund by two years, starting Aug. 31, 2015, Ms. Culbertson said in her e-mail. The fund is benchmarked to the MSCI ACWI ex-U.S. index.
The school fund’s real estate consultant, Courtland Partners, also received a contract extension of four years, starting Aug. 31, 2015.
Also, PSF’s return was -1.7% in the three months ended Sept. 30, barely missing the -1.6% return of its benchmark, meeting materials showed. Assets of the fund declined 2% from $30.5 billion as of June 30.
PSF returns have topped those of its benchmark in every other measurement period ended Sept. 30: one year, 9.7% (benchmark, 9.3%); three years, 12.9% (benchmark, 12.6%); five years, 10% (benchmark, 9.6%); and 10 years, 7.3% (benchmark, 7.1%).
Multiyear returns are annualized and gross of fees.