2013 U.S. Investment Management Awards — Large Public Plan

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Large Public Plan


The $117 billion Teacher Retirement System of Texas knew that it was getting a big overhaul in 2006 when it hired Thomas (Britt) Harris. In his interview he’d told trustees that as CIO he would shake up the traditional mix of stocks and bonds that composed the portfolio, and he did just that, adding alternatives — including 20 percent allocations to both real assets and private equity — and hiring external managers. Harris does not believe in traditional diversification. Under his direction the Teacher Retirement System now consists of a large central portfolio that will do well in normal economic times and two smaller portfolios that are designed to flourish in more-challenging scenarios. At the same time, Harris has established strategic relationships with asset managers, including New York–based Apollo Global Management and KKR & Co., giving them broad latitude in their investments. “We understand that outperforming markets is not easy,” says Harris, 55, adding that “it is also true that markets are not efficient.” The fund returned 13.9 percent in 2012, 1.7 percentage points above its benchmark. Harris joined the Texas system in 2006 from hedge fund firm Bridgewater Associates, where he was briefly CEO. But it was his work in the mid-1990s at GTE Corp. — where as a portfolio manager he helped pioneer the concept of strategic partnerships with asset managers — that left its mark on his investment philosophies, as well as on the industry. — Julie Segal