Britt Harris went home in 2006 to revive the giant Teacher Retirement System of Texas. After two decades back East, where he’d run Verizon Communications’ pension fund and served as CEO of quantitative investment manager Bridgewater Associates, the Bryan, Texas, native took one look at the more than $100 billion TRS portfolio and saw a dangerously narrow, all-too-basic mix of stocks and bonds that urgently needed a shaking up. Harris had a personal interest at stake: His 73-year-old mother, Allana, a retired fifth-grade science teacher, receives a $1,200 check from TRS each month at her home in Mesquite, Texas. When he interviewed for the job of chief investment officer, Harris was blunt: He told the board of trustees, which oversees the system and hires its CIO and executive director, that he would take the position only if he could make widespread changes. “It wasn’t an ultimatum, but I wanted to...