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 3/31/2016 — 27.1% US Equities, 16.7% Non-US Equities, 29.3% Core Fixed Income, 6.3% Non-Core Fixed Income, 8.0% Absolute Return, 5.6% Real Return, 6.6% Real Estate, 0.2% Private Equity, and 0.2 Unallocated 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

    • Traditional Asset Classes
      • RVK
    • Absolute Return and Real Return
      • Albourne America, LLC
    • Real Estate
      • Courtland Partners, Ltd.
    • Private Equity
      • StepStone Group, LP

Investment Managers

    • Equities
      • Acadian Asset Management, LLC
      • Champlain Investment Partners, LLC
      • Epoch Investment Partners, Inc.
      • Lazard Asset Management, LLC
      • Northern Trust Investments, N.A.
      • SASCO Capital, Inc.
      • State Street Global Advisors
      • The Boston Company Asset Management, LLC
      • UBS Global Asset Management Trust Company
      • Wasatch Advisors Inc.
      • Wellington Management Company, LLP
      • 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
      • White Oak Summit Fund, LP
    • Private Equity
      • Harvest Partners VII, LP
      • Searchlight Capital II, LP
      • Tritium I, LP
      • TPG Tao Special Situations Partners
      • H.I.G. Bayside Fund IV
      • Carlyle Energy Mezzanine Opportunities Fund II, LP
    • Real Return
      • Colchester Global Investors
      • Nuveen Asset Management LLC
      • MTP (Magnetar) Energy Opportunities Fund II, LLC
    • Absolute Return
      • Blackstone Alternative Asset Management, LP
      • Alyeska Fund, LP
      • Graticule Asia Macro Fund, LP, LP
      • Varde Investment Partners, LP
      • Myriad Opportuniities US Fund Limited
      • Roystone Capital Partners, LP
      • Southpoint Qualified Fund, LP
    • Active Real Estate*
      • Abacus Capital Group, LLC
      • Alcion Real Estate Partners Fund III-B, LP
      • Greenfield Partners, LLC
      • H/2 Core Real Estate Debt Fund LP
      • H/2 Credit Partners LP
      • Harrison Street Real Estate Capital, LLC
      • Invesco Advisors, Inc.
      • Lubert-Adler Management Co., LP
      • Miller Global Properties, LLC
      • Moorfield Real Estate
      • Rubenstein Partners, LP
      • Rubenstein Properties Fund III LP
      • Stockbridge Real Estate
      • Torchlight Debt Opportunity Fund V, LP
      • TPG Real Estate Partners II LP
      • Tristan European Property Investors Special Opportunities 4 LP
      • USAA Eagle Real Estate Feeder I, LP
      • Walton Street Capital, LLC
*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.