Texas TRS expands private markets portfolio with $500M allocated to buyout, real assets

Register for the upcoming Annual Texas Institutional Forum

The $225.3B Teacher Retirement System of Texas (TRS) is continuing to build out its private markets portfolio, committing a total of $500M across buyout and infrastructure strategies in April.

The TRS has steadily increased exposure to private equity, real estate and infrastructure, targeting roughly a third of its trust assets toward private markets. Allocations include a 12% target to private equity, a 15% target to real estate and a 6% target to energy, natural resources and infrastructure (ENRI).

Within private equity, the fund allocates across buyout and venture capital strategies. Within real estate, strategies include core, opportunistic, value-add and special situations. Within the ENRI portfolio, strategies include value-add, opportunistic and core investments.

Among the commitments made is a $100M investment in Gridiron Capital’s latest flagship buyout vehicle, which focuses on lower-middle-market companies across the consumer products, business services and industrial sectors.

The largest commitment in the latest tranche is a $200M allocation to Leonard Green & Partners’ Green Equity Investors X fund. Leonard Green is a longstanding private equity manager specializing in large-cap buyouts across consumer, healthcare, business services, retail and technology-enabled companies.

Additionally, the TRS committed a combined $100M across two Kingswood Capital Management vehicles, including a $77M commitment to an opportunities fund and a $23M commitment to a small-cap fund. Kingswood focuses on operational turnarounds and lower-middle-market consumer and industrial businesses, including in the healthcare, aerospace and defense, automotive aftermarket, distribution, and food and beverage sectors.

Within its ENRI portfolio, the TRS committed an additional $100M to Macquarie Infrastructure Partners VII. Infrastructure remains a strategic growth area for the pension fund as it seeks exposure to energy and transportation assets, inflation protection, stable cash flows and long-duration investments.

All of the commitments were made to firms with existing manager relationships with the pension fund.