Review of Absolute Return Asset Class
May 21, 2010
COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: ACTION
STATE BOARD OF EDUCATION: ACTION
SUMMARY: This item provides the opportunity for the committee and board to review structural issues surrounding the absolute return asset class. Goldman Sachs is currently on the watch list and the committee will consider a range of opportunities to restructure, including possibly issuing an RFP.
STATUTORY AUTHORITY: Texas Constitution, Article VII, §5(f).
PREVIOUS BOARD ACTION: At the July 2006 meeting, the board approved a long-term strategic asset allocation which included a 10% allocation to the absolute return asset class.
BACKGROUND INFORMATION AND SIGNIFICANT ISSUES: Goldman Sachs was selected in January 2008 to provide investment management services for the absolute return fund of funds asset class for the Permanent School Fund. Representatives of Goldman Sachs made a presentation to the committee at its July 2009 meeting on the portfolio managed for the Permanent School Fund.
FISCAL IMPACT: The income of the Permanent School Fund is projected to be $60.7 million during fiscal year 2010.
PROCEDURAL AND REPORTING IMPLICATIONS: Not applicable.
PUBLIC COMMENTS: None.
OTHER COMMENTS AND RELATED ISSUES: None.
Commissioner of Education
Staff Member Responsible:
Holland Timmins, Executive Administrator
and Chief Investment Officer of the
Texas Permanent School Fund