Texas ERS Shifts 25% of Public Equity Outside, Completes US Small-Cap RFQ
Updated
Updated · Top1000funds.com · Aug 10
Texas ERS Shifts 25% of Public Equity Outside, Completes US Small-Cap RFQ
1 articles · Updated · Top1000funds.com · Aug 10
Summary
$46 billion Texas ERS is moving about a quarter of its public equity book from internal management to external managers, leaving its in-house team running roughly 50% of equities, or $8 billion-$9 billion.
The shift is aimed at countering market concentration and adding less-correlated alpha streams after the fund's diversified positioning trailed its benchmark—public equity returned 26% versus 28%—even as Nvidia alone tops $700 million.
Capacity limits at preferred managers helped drive the change: ERS said its top two external managers, which oversee about $2 billion combined, had only $50 million of additional room.
A US small-cap RFQ has already produced two managers and will be extended to global strategies, replacing slower RFP processes that can take 12-18 months and giving ERS more leverage on terms and fees.
ERS is also exploring portable alpha and crypto exposure through hedge funds rather than direct coins, though CIO David Veal said governance hurdles and valuation concerns still make both areas early-stage discussions.