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Permanent School Fund Corp. seeks staffing to expand asset management after allocation shift raised record ASF transfer
Summary
The Texas Permanent School Fund Corporation told the subcommittee it has redeployed roughly $28 billion of PSF assets to a new allocation, lifted distributions to the Available School Fund and is requesting funding and FTEs to scale investment and operations.
The Texas Permanent School Fund Corporation told the Article III subcommittee it is reorganizing to pursue higher risk‑adjusted returns, seeks additional investment staff, and said its asset allocation changes allowed a record transfer increase to the Available School Fund.
Why it matters: The PSF supports the state’s Available School Fund (ASF), which funds some Foundation School Program obligations. Changes to PSF investment strategy can raise distributions to the ASF over time, reducing pressure on state general revenue or local tax levies.
What the corporation told the committee: CEO Robert Borden and PSF Board Chairman Tom Maynard described a rapid asset‑allocation shift in 2024 that redeployed about $28 billion and improved the fund’s relative performance ranking among peer endowments. Borden told members the PSF’s market value was about $56.9 billion as of August 2024 and that the board approved increasing the ASF transfer to a record $4.8 billion per biennium; the corporation said it believes more market‑outperformance is possible with additional investment talent.
Budget request and governance: LBB staff summarized the PSF Corporation’s introduced request to add IT operational funding and to phase in up to 24 additional FTEs for investment and support personnel. PSF leaders said they trimmed underperforming positions early in the corporate transition and are now asking for resources to scale implementation and governance; Borden described a compensation plan that ties incentive pay to multi‑year realized excess returns.
Bond guarantee program: The board said the PSF bond‑guarantee program continues to back a large portfolio of school debt and that it has not experienced a default; board leaders noted charter bond exposure is a small fraction of the total and pointed to a reserve established when issuers’ underlying ratings fell.
Ending: The PSF Corporation asked the subcommittee to consider its staffing and IT items to support the new strategy and reporting and to maintain a two‑tier incentive structure for investment professionals designed to reward realized outperformance tied to longer measurement periods.
