The $27.4 billion Texas Employees Retirement System, Austin, approved a target commitment of $800 million to private equity strategies in the fiscal year ending Aug. 31, 2021, during a board meeting Wednesday, documents showed.
ERS trustees committed the same amount to private equity in the current fiscal year that ends Aug. 31.
Private equity fund officers said in their report that they expect to make eight to 12 commitments to new private equity funds, and three to eight opportunistic private equity co-investments in the 2021 fiscal year.
Among areas of interest are buyouts, growth equity and secondaries, the report said.
ERS' target commitments to private equity program are projected to total $6 billion during the five fiscal years beginning Sept. 1 and ending Aug. 31, 2025.
"ERS was over its targeted private equity allocation of 13% as of Dec. 31, 2019. The proposed pacing plan projects a relatively smooth glidepath to the target over the next several years," investment officials said in the report.
The target commitments for fiscal years ending Aug. 31 is $1.2 billion in 2022; $1.3 billion in 2023; $1.3 billion for 2024; and $1.4 billion in 2025.
The pacing schedule includes an investment range for each year — from $600 million to $1 billion for fiscal year 2021, for example — because "such flexibility allows for adjustments related to market conditions and the opportunity set over time," the report said.
The market value of the fund's private equity portfolio was $4.1 billion as of June 30, or 15%, 2 percentage points above the plan's 13% target to the asset class, an investment report provided to the board showed.