State to invest $900 Million in private-equity alternatives
The Tennessee Consolidated Retirement System will soon hire a new executive to plan and invest up to $900 million in pension-fund assets in private equity.
Earlier this year, the Tennessee General Assembly gave TCRS unprecedented authority to invest up to 3 percent of TCRS' $32 billion in assets in what are often labeled alternative investments.
Regardless of whether the council works its way through that policy task next month, Hennessee said that before the end of September TCRS will begin recruiting candidates for the new equities directorship. "We're not waiting on the policy" to begin advertising the position, Hennessee said, although he noted the PE director job description has not been finalized.
Also, Hennessee said the pensions council and the new private-equity director will be responsible for publishing a request for proposals from companies that would like to provide advice and counsel to TCRS with respect to attractive investment alternatives. That procurement of services will be overseen by the yet-to-be-hired equities director, Hennessee said.
Hennessee said TCRS has been preparing for the new investment activity for some time. He noted that the state's chief investment officer, Michael Brakebill, joined State Treasurer Dale Sims' staff six months ago from the Teacher Retirement System of Texas. In Texas, Brakebill was director of domestic equities for the $100 billion agency.
Momentum has been building on the private-equities front for some time: The state's long-standing investments advisor - San Francisco-based Strategic Investment Solutions - analyzed TCRS assets and liabilities a year ago. At that time, according to a copy of the resultant SIS report provided to VNC, SIS recommended TCRS "consider selectively adding to its Real Estate allocation and implementing an Alternative Investment program, with a primary focus on Private Equity."