Investments


Guiding Principles

The overall objective of TMRS’ Investment program is to ensure that members, retirees, and beneficiaries are provided the benefits they have been promised by their employers at a reasonable and predictable cost to the employers. Assets will be invested with a total return posture, given appropriate consideration for portfolio volatility (risk) and liquidity. Total return includes dividends, interest, and realized and unrealized capital appreciation

General Objectives

TMRS investments are held in trust for the exclusive benefit of members and invested under the provisions of the TMRS Act. The investment statutory guidelines for TMRS are found in the Texas Government Code, Sections 855.301 through 855.303.

Investments are made with the degree of judgment and care, under the circumstances, that persons of prudence, discretion, and intelligence exercise in the management of their own affairs, considering the probable income from the securities and probable safety of their capital and in consideration of the purposes, terms, distribution requirements, and other circumstances of the trust. Investment and management decisions respecting individual assets will be evaluated not in isolation but in the context of the investment portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.

Asset Allocation as of 12/31/2014 — 27.12% US Equities, 17.70% Non-US Equities, 36.25% Core Fixed Income, 4.73% Non-Core Fixed Income, 4.69% Absolute Return, 4.12% Real Return, 5.24% Real Estate, 0.15% Cash.
Strategic Target Allocation (At its meeting on July 30, 2015, the TMRS Board approved a new portfolio target allocation.) — 17.5% US Equities, 17.5% Non-US Equities, 10% Core Fixed Income, 20% Non-Core Fixed Income, 10% Real Return, 10% Absolute Return, 5% Private Equity, 10% Real Estate.

Professional Advisors


Economic Advisor

  • A. Gary Shilling & Co.

Investment Consultants

  • General
    • RVK
  • Absolute Return and Real Return
    • Albourne America LLC
  • Real Estate
    • Courtland Partners Ltd.
  • Private Equity
    • StepStone Group LP

Investment Managers

  • Equities
    • Northern Trust Investments, N.A.
    • UBS Global Asset Management Trust Company
    • State Street Global Advisors
    • SASCO Capital, Inc.
    • Epoch Investment Partners, Inc.
    • Wellington Management, LLP
    • Lazard Asset Management, LLC
    • The Boston Company Asset Management, LLC
    • Champlain Investment Partners, LLC
    • Acadian Asset Management, LLC
    • William Blair & Company, LLC
  • Fixed Income
    • BlackRock Financial Management, Inc.
    • Pacific Investment Management Company LLC
  • Non Core Fixed Income
    • Ellington Management Group LLC
    • Guggenheim Partners Investment Management, LLC
    • Highland Capital Management, LP
    • Voya Investment Management Company, LLC
  • Real Return
    • Colchester Global Investors
  • Absolute Return
    • Blackstone Alternative Asset Management, LP
  • Active Real Estate*
    • Abacus Capital Group, LLC
    • Core and Value Advisors, LLC
    • Greenfield Partners, LLC
    • Harrison Street Real Estate Capital, LLC
    • Harrison Street Securities, LLC
    • Miller Global Properties, LLC
    • Moorfield Real Estate
    • Rubenstein Partners, LP
    • Stockbridge Partners, LLC
    • Walton Street Capital, LLC
    • Invesco Advisors, Inc.
    • Lubert-Adler Management Co., LP
*TMRS does not currently have investments in all of the active funds listed.

Investment Reports Archive


2011 Investment Update

In 2011, TMRS continued implementing the following strategic target allocations which were adopted by the Board in June 2009, with implementation to occur over a multi-year period (see pie charts.)

There were several initiatives during 2011 aimed at continuing our progress toward the target allocations, including monthly commitments to U.S. and international equity index funds.  By the end of 2011, the equity target allocations were met with 40% of the fund invested in passively managed equity index funds (20% in domestic equities and 20% in international equities). TMRS began funding its real estate target allocation by committing $200 million to real estate limited partnerships and funding $97 million.  With the assistance of TMRS’ real estate consultant, ORG, TMRS will continue to seek out and fund additional real estate investments over the next few years in order to meet its 10% target.  In addition, TMRS funded its 5% target allocation to the real return asset class through investment in global inflation-linked bonds.  Assets allocated to fixed income managers totaled 54.2% and will gradually move to the 35% target allocation as fixed income funds other asset classes. 

The Board will continue to authorize implementation to the strategic target allocations in stages. To ensure that the risk tolerance remains appropriate, the target allocations will be reviewed at least annually for reasonableness relative to significant economic and market changes or changes to the Board’s long-term goals and objectives.

2011 Returns

The overall one-year rate of return on the $18.5 billion investment portfolio was 2.41% with fixed income the best performing asset class, earning 7.99%, while the return on equities was 1.03% domestic and -13.35% international.

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©2015 Texas Municipal Retirement System.
This website is an informal presentation of the TMRS Act and related law. If any specific questions of fact or law should arise, the statutes will govern. TMRS, MyTMRS, and the TMRS logo are registered trademarks of the Texas Municipal Retirement System.