Hiring for Texas Teachers’ Private Equity Fleet ‘On Schedule’

CIO Jerry Albright ‘pleased’ as hiring worries for internalization plans diminish.

The $154.3 billion Teacher Retirement System of Texas is on schedule with its staffing and happy with acclimating new hires to its work culture for its in-house private equity plans.

“One of the main concerns we had was our ability to hire staff as quickly as we’d have liked,” said Jerry Albright, the Texas fund’s chief investment officer, at its April board meeting. “I am pleased to report today that we are on schedule with our hiring.”

The fund plans to hire 32 people in 2019 for its expansion strategy known as “Building the Fleet.” So far, 15 new hires have accepted gigs at the Texas fund, which has sent 18 total job offers as of its Thursday board meeting. It plans to hire the remaining candidates throughout the year.

Texas Teachers’ has mostly been hiring analysts and associates, with a bulk of the recruiting success coming from external firms. The firm has also been doing media rounds and partnering with Howard University to hire new graduates. “We’re very happy with our hiring strategy,” Albright said, adding that Texas Teachers’ has “spent a lot of time” on finding new employees who are both cultural and functional fits.

The fund has started an “on-boarding plan” which focuses on getting new hires used to the work culture via career paths and motivation strategies. “When you bring in new people they have to get acclimated to the culture and then you have to reinforce the culture with the people that are already there,” Albright said.

“Building the Fleet’s” master plan is to shift 30% to 50% of Texas Teachers’ private market portfolio in-house. Texas also wants to manage more illiquid investments internally, and has been discussing whether it should add 120 members to its investment division over the next five years, nearly doubling the staff of 150. 

Restructuring the investment staff is part of a bigger move among public pension funds. The objective is to cut costs on management fees and achieve better returns to ensure payouts as baby boomers begin to retire. This management style is common in Canadian plans.

“We’ve continued to hit this area pretty hard and we’ve been really successful so I’m really happy with that,” said Albright.

The fund currently allocates 13% to private equity.


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