The Texas Employees Retirement System, Austin, approved moderate changes to the asset allocation of the $33 billion defined benefit plan during an Aug. 24 meeting in response to the system's asset-liability study.
The system's new investment policy statement, which includes the asset allocation, will be effective on Sept. 1, said spokeswoman Mary Jane Wardlow in an email.
The largest change was a 3 percentage points increase in the allocation to private equity to a 16% long-term target from 13%, a report from the meeting showed. The private equity portfolio totaled $6.5 billion as of June 30, with an actual allocation of 19.7%.
The $3.7 billion fixed-income portfolio's target was increased to 12% from 11%.
The system's global private credit target will remain at 3% of plan assets while the public global credit portfolio target will be reduced to 9% from 8%.
The $1.6 billion hedge fund portfolio's target allocated increased to 6% from 5%.
The largest reductions in the asset allocation were dropping the $10.9 billion public equity portfolio's target allocation down to 35% from 37% and the $1.7 billion infrastructure portfolio to 5% from 7%.
The target allocation to cash was lowered to 1% from 2%, and the system's $361 million special situations portfolio, which had a 1% target, is being eliminated, the report showed.
Asset class targets that were not changed in the new allocation applied to public real estate at 3% and private real estate at 9%.
The report said the target changes will "move the trust from a target of 83% risk-seeking assets to 80%, a somewhat more conservative stance that would align more closely with growth-oriented institutional peers."