Private Equity: Private Equity Takes Away from Texas Retirement System

https://dailyalts.com/wp-content/uploads/2020/08/texas.jpg

Private Equity Takes Away from Texas Retirement System

The Employees’ Retirement System of Texas’s private equity portfolio has lost 2.14 percent as of June 30.  The private equity portfolio is worth $4.4 billion, but it was the biggest detractor at a 1.9 percent loss.  Before the Coronavirus pandemic, the private equity portfolio was strong at a 7.6 percent net internal rate of return.  

A meeting will take place on Wednesday to determine what course of action to take to rebuild the private equity arm of the Employees’ Retirement System.  Some of these changes could include more buyouts and co-investments.  According to a statement regarding the plan, “The buyout segment of the market has been and will continue to be the key driver of co-investment deal flow for the portfolio.”  49.2 percent of the ERS’ private equity portfolio will be dedicated to buyout funds.  Some of the top private equity managers include LGT Capital Partners, Riverside Company, and Landmark Partners. 

The system will allocate 20 percent of capital to co-investing.  This can lower management fees and ultimately maximize returns.  The ERS will also induce a growth-equity exposure strategy.  In a statement by the plan, “Growth equity strategies are particularly relevant when it comes to international diversification where buyout markets in certain jurisdictions are less mature and growth equity represents the primary way to participate in those countries.”  

The ERS managed $27.44 billion as of June 30.  This is a decrease from $28.67 billion in the previous year.  Its returns of 0.3 percent also underperformed, missing the 2.9 percent target.  

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Shape

Latest Alternative Investment News

https://dailyalts.com/wp-content/uploads/2020/09/Splitpay_Press_Header_2232 × 1200.jpg
FinTech: Buy-Now-Pay-Later Lender Affirm Raises $500M
September 18, 2020     FinTech, News

Affirm announced Thursday its raise of $500 million in a G Round led by GIC and Durable Capital Partners LP. Other investors included Lightspeed Venture Partners, Wellington Management Company, Baillie…

https://dailyalts.com/wp-content/uploads/2020/09/workouts-cardio-classes-600x562-1.jpg
Venture Capital: Tonal, The Smart Home Gym Startup, Taps $110M
September 18, 2020     Artificial Intelligence, News, Venture Capital

Tonal, a startup that makes compact, AI-powered, wall-mounted home fitness equipment, announced Thursday its raise of $110 million. Returning investors L Catterton, Sapphire Sport, Shasta Ventures, Mayfield, Evolution Media, and…

https://dailyalts.com/wp-content/uploads/2020/09/CollColl_Villa_Sophia_BoysPlayNice_24-resized-car.jpg
Artificial Intelligence: An AI-Controlled House Built By A Computer Scientist
September 18, 2020     Artificial Intelligence, News, Real Estate

It’s a striking, futuristic residence that commands panoramic views, combines home with a place to work, and is controlled by artificial intelligence having its own data center. Based outside Prague,…

https://dailyalts.com/wp-content/uploads/2020/09/Kraken-image-text2.jpg
Digital Assets: Kraken Digital Exchange Wins U.S. Bank Charter
September 18, 2020     Digital Assets, FinTech, News

The State of Wyoming greenlighted Kraken’s application to form the world’s first Special Purpose Depository Institution (SPDI). Kraken Financial, the new entity, can operate as a fully independent bank and…