The Teacher Retirement System of Texas (TRS) is looking to ramp up its Asia presence and is planning to set up an office in Singapore, its second overseas location after London.
About 15% of the $151.4 billion pension fund is already invested in Asia, TRS executive director Brian Guthrie said in a report by industry news portal Pensions & Investments. The fund’s investment staff wants to get “boots on the ground” in the region to gain insight into local markets and to know money managers, he said.
The fund’s asset allocation team counts Indian-origin and IIT Bombay alumnus Mohan Balachandran, who has been with it for a decade.
In April, TRS said it planned to invest an additional $3 billion in emerging markets over three to five years. This will be on top of the existing $5.8 billion TRS has invested in emerging markets since 2005.
According to its 2017 annual report, the fund has about $1 billion of exposure to India across investment vehicles. However, its investments are not disclosed.
Other US-based pension funds like California Public Employees’ Retirement System (CalPers) have been investing in India for the past several years. In recent years, Canadian pension funds CPPIB, CDPQ and Ontario Teachers’ Pension Plan have also stepped up their investments in India.
TRS opened its London office in 2015. This helped the fund close co-investment deals totaling $18 billion in the UK and Europe since then.
If the Texas Legislature approves the proposal, the new office in Singapore is likely to be established by midsummer 2019. The office will be initially staffed with three or four people from the pension fund's Texas headquarters, with local employees to be added over time, the report added.
According to its website, the TRS board has targeted an annual average long-term return of 8%. It is based on a policy asset mix comprising a 57% allocation to global equity markets, 22% to real return, 16% to stable value and 5% to risk parity allocations.