(June 21, 2010) — The Texas Teacher Retirement System (TRS) had a record investment gain of 35% — or $25 billion — for the year ended March 31, breaking its previous record of 32% in 1998.
The Austin-based fund ended the first quarter with a value of $96.7 billion over the previous 12 months, erasing most of the decline produced during the severe financial downturn. TRS’ full-year return represents the biggest ever achieved by the fund, Jerry Albright, TRS’s senior managing director of its investment division, told ai5000.
“We’ve benefited from being in the right asset at the right time, leveraging strategic investments, such dislocated credit, to take advantage of credit opportunities,” Albight said.
During the period, global equity markets rallied strongly after bottoming in March 2009, with the fund’s global equity portfolio advancing by more than 53%. Overall, the fund outperformed general market returns by approximately 2.5%, or about $2 billion.
“The period just prior to the recent gains tested the resolve of the TRS investment team, our board and that of our members,” stated TRS Chief Investment Officer Britt Harris, who reported the verified figures to trustees at their June 17-18 board meeting. “While the recent gains are very encouraging, we all know that this entire period has been exceptionally volatile and virtually unprecedented. While the fund has performed well, we still have much work to do.” Harris added that even though TRS has made up for the losses suffered during the financial downturn, it must continue meeting long-term obligations to its every member through cooperation, patience and persistence.
According to a statement on its web site, the fund additionally hired executive recruitment firm Korn/Ferry International, selected at the fund’s board meeting, to assist with the search for a new executive director. The new executive director will replace Ronnie Jung, who announced in April that he will leave in July 2011. The board expects to complete the search before the end of the year.
TRS manages the $96.7 billion trust fund established to finance member benefits. Nearly 1.3 million public education and higher education employees and retirees participate in the system.
To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742