The $28.3 billion Texas Employees Retirement System, Austin, received approval for annual tactical plans for commitments totaling $1.1 billion to two alternative investment portfolios in the fiscal year ended Aug. 31, 2020.
During a board meeting Wednesday, trustees approved a target commitment of $650 million to private real estate in the next fiscal year, with $550 million earmarked for non-core funds managed by four to 12 managers, a meeting report showed. The balance will be committed to core real estate funds managed by up to two managers.
The target commitment to private real estate is $550 million in the fiscal year ended Aug. 31.
As of March 31, ERS had $2.064 billion committed and invested in private real estate, or 7.3% of plan assets.
The fund's long-term target for private real estate assets is 9%. Including fiscal year 2020, ERS targeted a total commitment of $1.67 billion to private real estate over the four-year period ended Aug. 31, 2023. Annual target commitments are $550 million in fiscal years 2021 and 2022 and $500 million in fiscal year 2023.
In infrastructure, ERS' investment team will commit $450 million to three to five funds in the fiscal year ended Aug. 31, 2020, board materials showed.
ERS investment officers targeted $400 million for commitments to infrastructure opportunities in the fiscal year ended Aug. 31.
The fund's commitments and investments in its infrastructure portfolio totaled $683 million as of March 31, representing 2.4% of plan assets.
The plan's long-term infrastructure target allocation is 7%. To build out the portfolio to its full allocation, including fiscal year 2020, ERS investment officers will commit a total of $1.75 billion to infrastructure, with $450 million earmarked for fiscal year 2021 and $425 million each in fiscal years 2022 and 2023.
