Overview of the Private Equity Asset Class

April 8, 2016

COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: ACTION
STATE BOARD OF EDUCATION: CONSENT

SUMMARY: This item provides an opportunity for the committee and board to review the private equity investment policy.

STATUTORY AUTHORITY: Texas Constitution, Article VII, §5(f).

PREVIOUS BOARD ACTION: None.

BACKGROUND INFORMATION AND SIGNIFICANT ISSUES: At the April 2013 meeting, the board approved the Hybrid Program – NB discretionary account + Jointly Managed Program. In July 2014, the board set a long-term strategic asset allocation, which included a 10% allocation to the private equity asset class. At the September 2015 meeting, the board approved moving the Jointly Managed Program to Staff Discretion with NB acting as a non-discretionary advisor and continuing the NB discretionary account.

FISCAL IMPACT: The distribution of the Permanent School Fund is projected to be $2.1 billion during the 2016-2017 biennium.

PROCEDURAL AND REPORTING IMPLICATIONS: Not applicable.

PUBLIC COMMENTS: None.

ALTERNATIVES: None.

OTHER COMMENTS AND RELATED ISSUES: None.

Staff Member Responsible:
Holland Timmins, Executive Administrator
and Chief Investment Officer of the
Texas Permanent School Fund