November 2019 Committee on School Finance/Permanent School Fund Item 11

Review of the Absolute Return Asset Class for the Permanent School Fund

November 14, 2019

COMMITTEE ON SCHOOL FINANCE/PERMANENT SCHOOL FUND: DISCUSSION
STATE BOARD OF EDUCATION: NO ACTION

SUMMARY:  This item provides an opportunity for the committee to review the absolute return asset class.

STATUTORY AUTHORITY:  Texas Constitution, Article VII, §2 and §5; 19 Texas Administrative Code (TAC), Chapter 33.

The Texas Constitution, Article VII, §2 and §5 establish the permanent school fund, the assets that comprise the permanent school fund, the bond guarantee program, the available school fund, and authorize the State Board of Education (SBOE) to manage and invest the permanent school fund in accordance with the prudent person standard.

Administrative rules found in 19 TAC Chapter 33 provide a statement of investment objectives, policies, and guidelines of the Texas Permanent School Fund and Bond Guarantee Program as adopted by the SBOE. 

The full text of statutory citations can be found in the statutory authority section of this agenda.

PREVIOUS BOARD ACTION:  At the June 2019 meeting, the board reaffirmed the Permanent School Fund Long-Term Strategic Asset Allocation Plan with an allocation of 10% to the absolute return asset class.

BACKGROUND INFORMATION AND JUSTIFICATION:  None

PUBLIC 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. 

PUBLIC COMMENTS:  None

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