Decision on Absolute Return Investments
January 21, 2011
COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: ACTION
STATE BOARD OF EDUCATION: ACTION
SUMMARY: This item provides an opportunity for the committee and board to review the current manager allocations within the absolute return asset class and consider any changes to the managers’ watch list status or rebalancing of assets between new and existing managers.
STATUTORY AUTHORITY: Texas Constitution, Article VII, §5(f).
PREVIOUS BOARD ACTION: At the November 2010 meeting, the board approved the selection of GAM USA, Inc. to provide investment management services for absolute return separate account fund of funds for the Permanent School Fund.
BACKGROUND INFORMATION AND SIGNIFICANT ISSUES: At the July 2006 meeting, the board set a strategic asset allocation which included a 10% allocation to the absolute return asset class.
FISCAL IMPACT: The distribution of the Permanent School Fund is projected to be $1.6 billion during the 2012-2013 biennium.
PUBLIC AND STUDENT BENEFIT: The distribution of the Permanent School Fund will flow to the school districts and reduce the tax burden to the public and the state of Texas.
PROCEDURAL AND REPORTING IMPLICATIONS: Not applicable.
PUBLIC COMMENTS: None.
ALTERNATIVES: None.
OTHER COMMENTS AND RELATED ISSUES: None.
Respectfully submitted,
Robert Scott
Commissioner of Education
Staff Member Responsible:
Holland Timmins, Executive Administrator
and Chief Investment Officer of the
Texas Permanent School Fund