July 2016 Committee on School Finance Permanent School Fund Item 8

Decision on Absolute Return Investment Managers

July 22, 2016

COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: ACTION
STATE BOARD OF EDUCATION: CONSENT

SUMMARY: This item provides an opportunity for the committee and board to consider contract extensions with Blackstone Alternative Asset Management, L.P. and Grosvenor Capital Management, L.P.

STATUTORY AUTHORITY: Texas Constitution, Article VII, §5(f).

PREVIOUS BOARD ACTION: At the April 2012 meeting, the board approved entering into an absolute return strategic relationship with Blackstone Alternative Asset Management, L.P. and Grosvenor Capital Management, L.P. At the April 2014 meeting, the board approved a two-year extension beginning September 1, 2014 through August 31, 2016 with Blackstone Alternative Asset Management, L.P. and Grosvenor Capital Management, L.P.

BACKGROUND INFORMATION AND SIGNIFICANT ISSUES: None.

FISCAL IMPACT: The distribution of the Permanent School Fund is projected to be $2.1 billion during the 2016-2017 biennium.

PUBLIC AND STUDENT BENEFIT: The distribution of the Permanent School Fund will flow to the school districts and reduce the tax burden to the public and the state of Texas.

PROCEDURAL AND REPORTING IMPLICATIONS: Not applicable.

PUBLIC COMMENTS: None.

OTHER COMMENTS AND RELATED ISSUES: None.

Staff Member Responsible:
Holland Timmins, Executive Administrator
and Chief Investment Officer of the
Texas Permanent School Fund