The Teacher Retirement System of Texas, the seventh-largest US public pension fund, will invest US$200 million in private equity in Asia, whose economies are leading the world out of a recession.
The Austin, Texas-based fund has assigned US$100 million each to Squadron Capital and Morgan Creek Capital Management LLC to help it invest with private equity firms that focus on emerging Asian economies such as China, spokesman Howard Goldman said in an e-mailed response to questions.
Stock markets in Asia have outperformed the global average this year as China’s and India’s economies rebounded, allowing buyout firms managed by TPG Inc and Goldman Sachs Group Inc to profit by selling private-equity investments.
“Asia will continue to be a growth story and the late entrants will still be able to enjoy that growth,” said Vincent Pun, a principal at Diversus Investment Advisers Pty Ltd, which advises private equity and hedge funds. “It makes sense for Teacher Retirement to invest through funds-of-funds in Asia because they have people on the ground and experience investing in the region.”
The California Public Employees’ Retirement System, the biggest US pension plan; second-ranked California State Teachers’ Retirement System; and Canada Pension Plan Investment Board, the country’s second-biggest public-pension manager, have made investments in private equity firms in Asia, Pun said.
Teacher Retirement, manager of more than US$83 billion for almost 1.3 million public education employees and retirees, last month started a US$250 million gold fund investing in precious-metals mining stocks and exchange-traded funds, its Web site said.
Morgan Creek Capital, based in Chapel Hill, North Carolina, manages US$9 billion for institutions and wealthy clients. Squadron Capital is a Hong Kong-based private equity investment firm that manages more than US$1 billion in assets.
Private-equity managers, which use debt to fund acquisitions, announced a record US$1.58 trillion of transactions worldwide from 2005 to 2007, before the credit contraction stalled takeovers and halted sales of companies the firms had prepared for divestment, Bloomberg data indicated.
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