Texas Municipal Retirement System, Austin, will commit up to $1.2 billion to private equity in 2021, a potential increase of $200 million from the prior year, according to an annual review of the asset class presented at a board of trustees' meeting Thursday.
Investment officers of the $30 billion pension fund in the board report described the private equity pacing plan — with a range of between $900 million and $1.2 billion — as having "moderately increased allocation goals for 2021 (with) most allocation likely to be taken up by TMRS' existing managers."
In 2020, the pension fund's private equity commitment goal is $750 million to $1 billion. About $863 million has been committed so far this year "with more planned activity prior to year-end," according to the report.
TMRS also will implement a new co-investment plan for the private equity portfolio in 2021 with target deployment of about $100 million per year.
The pension fund still is in the relatively early stages of increasing the private equity portfolio to its 10% target portfolio allocation.
As of June 30, the net asset value of the TMRS' private equity portfolio was $1 billion, about 3.4% of total plan assets. Commitments as of the same date totaled $3.3 billion to 52 investment vehicles run by 33 investment managers, the asset class review showed.
The breakdown by strategy of the pension fund's private equity portfolio as of June 30 was 45% buyout/control approaches, 38% growth equity/minority stakes and 17% special situations.