Decision on the Private Equity Structure of the Permanent School Fund
April 19, 2013
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 consider the current private equity structure of the Permanent School Fund and to consider pricing proposals from existing managers. Issuance of an RFP may also be considered.
STATUTORY AUTHORITY: Texas Constitution, Article VII, §5(f).
PREVIOUS BOARD ACTION: At the January 2010 meeting, the board approved the selection of Credit Suisse, Customized Fund Investment Group (CFIG) and NB Alternatives Advisors, LLC to serve as a private equity discretionary separate account manager with a $650 million allocation to each firm.
BACKGROUND INFORMATION AND SIGNIFICANT ISSUES: In July 2006, the board approved a strategic asset allocation plan which included a 6% allocation to private equity.
FISCAL IMPACT: The distribution of the Permanent School Fund is projected to be $2.0 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.
OTHER COMMENTS AND RELATED ISSUES: None.
Staff Member Responsible:
Holland Timmins, Executive Administrator
and Chief Investment Officer of the
Texas Permanent School Fund