Review of the Absolute Return Asset Class
November 20, 2009
COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: ACTION
STATE BOARD OF EDUCATION: ACTION
SUMMARY: This item provides an opportunity for the committee to receive an overview and recommendation of the absolute return asset class investments for the Permanent School Fund from NEPC, the Fund’s general investment consultant. The board may consider manager allocations and any changes necessary to those allocations.
STATUTORY AUTHORITY: Texas Constitution, Article VII, §5(f).
PREVIOUS BOARD ACTION: At the July 2006 meeting, the board adopted changes to the Long-Term Strategic Asset Allocation Plan. The revised allocation includes a number of new asset classes—private equity, absolute return, real return and real estate.
BACKGROUND INFORMATION AND SIGNIFICANT ISSUES: None.
FISCAL IMPACT: The income of the Permanent School Fund is projected to be $1.4 billion during the 2008-2009 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