Christopher Schelling will depart the $31 billion Texas Municipal Retirement System to join another ex-public pension investor’s firm, Windmuehle Funds.
Windmuehle (pronounced ‘windmill’) manages the personal assets of many wealthy institutional investors, Schelling said in a Tuesday interview. He joins April 27 as a managing director.
Schelling has spent almost a decade investing for public pensioners, leading private equity at Texas Municipal since 2015 and before that serving as deputy chief investment officer for Kentucky’s notoriously underfunded plan. He also writes a regular — and widely read— column for Institutional Investor.
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“One of the benefits of being with a large public plan is that you have scale,” he told II. “You can do investing that matters. And you might not have those opportunities in the private sector.”
But with great size comes a great administrative load, and moving to Windmuehle will bring him closer to the actual work of investing, Schelling said.
The young firm’s founder Robert Lee likewise hails from the institutional side. Lee started Windmuehle in 2018 following senior roles at Texas Tech University and the Employees Retirement System of Texas.
The two have known one another for many years, and as investors share a taste for “the stuff that slips between” private equity and hedge funds, as Schelling put it. “We’ve focused on things in those white spaces.”
Windmuehle specializes in just that: “differentiated, capacity‐constrained private market opportunities” packaged in a series of funds, meaning that individual clients opt in or out of any given investment, according to the firm.
In practice, this means that Windmuehle has a wide-open mandate to seed other managers, make direct deals, co-invest, and generally grab opportunities that others can’t. The firm might, hypothetically, spot a specialty private lender that’s spinning out from another relatively small and new manager, Schelling explained.
“A concentrated portfolio, with not a lot of competitors yet, and mid-to-upper teens return on cash flow. This is something that would be in Robert’s network, or my network, and Windmuehle is the type of entity that would help them get their fund off the ground, structure their portfolio, and construct terms and economics that are more favorable” to Windmuehle clients, he said.
Schelling would not disclose the company’s assets under management, but they are said to be growing.
Texas Municipal “will greatly miss Chris’ intellect and team orientation across many aspects of our organization,” CIO T.J. Carlson said in a yet-unpublished statement. Carlson and Schelling worked together in Kentucky as well as in Texas.
Schelling’s last day at the pension fund is set for March 27. He does not have a successor in place.