By David G. Barry
Teachers’ Retirement
System of Louisiana (TRSL) is
poised to launch a new asset allocation strategy—one that will result in
increased targets for real estate and venture capital and a pullback on stocks.
AON recently presented a report to TRSL’s board, outlining 10 possible
asset allocation strategies, two of which the board will consider on May 5,
said Michelle Millhollon, TRSL’s public communications director.
Both strategies have the $26 billion fund increasing real estate’s allocation
to 15% from 10%. Private equity, meanwhile, would go from 14%—3% of which is in
venture capital—to either 18% or 19% with venture capital increasing in both
scenarios to 7%. As of January 31, TRSL had 22.6% in private equity—7.6% of
which was in venture capital.
The plans to be considered by the board also would double infrastructure to 3%
and farmland to 1%.
To make up for these increases, TRSL would drop its target for equities and
public REITs, which are currently at 46%. Under the two scenarios, TRSL would
target 33% or 34.6%.
In addition to the new asset allocation strategy, TRSL is for the first time
seeking a manager to locate, evaluate and commit to co-investment opportunities
offered by private market investment funds. TRSL earlier this month received
proposals for the mandate, which will be approximately $300 million over a
three-year period, Millhollon said. The pension fund is seeking to select a
firm by early June.
According to the solicitation for proposals, the winning firm will have
discretionary investment authority to direct, suggest, manage, monitor or
acquire any private equity and real asset co-investments subject to the pension
fund’s investment policy statement.
Millhollon also said that TRSL’s investment committee recommended up to $50
million in EQT X, SCSp, a private equity fund, and up to $75
million in Cabot Industrial Value Fund, a real estate-focused
vehicle. These investments will be handled by TRSL’s private markets
manager, Hamilton Lane. At the same meeting, TRSL’s investment
committee was scheduled to consider investing in Advent International
GPE X, L.P., but Millhollon said TRSL did not commit to the fund at the
meeting.
