Texas Permanent School Fund

United States · North America · Founded 1845 · Sub-national permanent fund · Not an IFSWF member

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Focus

Texas Permanent School Fund: what it invests in

TechnologyFinancial servicesReal estateInfrastructure and utilitiesEnergy: oil and gasHealthcare and life sciences

Public equitiesFixed incomePrivate equityReal estatePrivate creditInfrastructure

Geography Domestic and global

Scale

Texas Permanent School Fund: how big it is, and on what basis

USD 60.6B

Net assets or equityAs of 2025-08-31

In US dollars: about USD 60.6B. Reported in US dollars.

1-year return 8.20% (net of fees)

Transparency

Texas Permanent School Fund: what it publishes

9.5 of 10 Band 5 of 5

Published 9 · Partly 1 · Not published 0

Our 10 item score. It measures what is public, not how well a fund is run.

Net positionS3: USD 60.6B (31 August 2025, audited); As of 2025-08-31
1-year returnS3: 8.20% (net of fees); As of 2025-08-31
10-year returnS3: 7.40% a year; As of 2025-08-31
School payouts 2026-27S6: USD 4.8B (record); As of 2026-01-12
Bonds guaranteedS6: About USD 144B; As of 2026-01-12
Private equity targetS7: 20%
Operating costS6: Under 0.1%; As of 2026-01-12
Transparency scoreS5: 9.5 of 10

At a glance. The Texas Permanent School Fund is a perpetual endowment for the state's public schools, created in 1845. Its audited net position was USD 60.6 billion at 31 August 2025. The Texas PSF Corporation invests it across public and private markets, mostly through external managers, pays a record USD 4.8 billion to schools in 2026-27 and guarantees about USD 144 billion of school bonds. S3 S1 S6

Key points

Net return of 8.20 percent for the year to August 2025, 7.95 percent a year over five years and 7.40 percent over ten. S3
Alternatives are about 56 percent of the policy mix from January 2026, led by private equity at 20 percent. S7
The Bond Guarantee Program backs about USD 144 billion of school and charter bonds, saving districts about USD 474 million a year. S6
USD 24.8 billion has been placed with managers that have a significant presence in Texas under its Texas First initiative. S6
In 2025 staff met 858 potential partners and hired 28 new managers, about one in 20. S6
Operating budget of USD 58.2 million for fiscal 2026, under 10 basis points of assets. S6
The fund publishes holdings for public markets but does not announce single private deals. S8 S3

Interesting facts

It began with USD 2 million in 1854, set aside by the state's first lawmakers for schools. S1
Its school bond guarantee has backed about USD 250 billion of debt since 1984, carrying AAA ratings from S&P and Aaa from Moody's. S1 S9 S10
Payouts work out at about USD 428 per Texas student a year. S3

Mandate and goals

The fund exists to give Texas public schools permanent funding through strong investment returns, and to cut school borrowing costs through the Bond Guarantee Program. S1

Provide permanent funding to Texas public schools. S1
Generate strong long-term investment returns. S1
Lower borrowing costs for school and charter districts through the Bond Guarantee Program. S1
Spending rule: Distributions go to the Available School Fund each biennium; the 2024 to 2025 rate was 3.32 percent, and supplemental payments are capped at USD 600M a year. S3 S4

How it invests

Industries	Technology, Financial services, Real estate, Infrastructure and utilities, Energy: oil and gas, Healthcare and life sciences. Sector agnostic S3 S8
Asset classes	Public equities, Fixed income, Private equity, Real estate, Private credit, Infrastructure, Hedge funds and absolute return, Commodities and gold, Cash and money markets S7
Stages	Buyout, Real estate, Infrastructure, Credit, Public markets S3
Geography	Domestic and global. Mainly US assets with a non-US developed equity sleeve; Texas First favours managers with a strong Texas presence S3
Direct / through funds / co-invest	No / Yes / Yes S3 S6
Ticket size	No ticket size is published. S3
External managers	Manager fees of USD 333.9M plus USD 198.0M of profit sharing in the year to June 2025; 28 new managers hired in 2025 S3 S6
Co-investment programme	Building direct and co-investment capacity under a Vice President hired in December 2025 S6

Asset mix: Private equity 17.84%, Core bonds 11.06%, Real estate 10.77%, Large cap US equity 10.6%, Non-US developed equity 7.9%, Private credit 7.4%, Bank loans 7.39%, Small and mid-cap US equity 6.23%, Infrastructure 5.91%, Absolute return 5.62%, Natural resources 3.73%, High yield 2.87%, Short term 2.68% (as of 2025-08-31) S3

Largest holdings: Invesco S&P 500 Equal Weight ETF USD 1,733.5M, NVIDIA USD 342.6M, Microsoft USD 302.7M, Apple USD 282.1M, Alphabet USD 176.2M (as of 2025-08-31) S8

Published criteria

Policy mix from January 2026: private equity 20 percent, large cap US equity 15, real estate 10.5, private debt 9.5, core bonds 9, non-US developed equity 8, infrastructure 6, absolute return 6. S7
A formal asset allocation study is held every two years. S7
Texas First gives preference to managers with a significant presence in Texas. S6

Past investments

Year	Investment	Type	Sector	Amount
2025	Texas First manager placements. Assets placed with managers that have a significant presence in Texas. S6	Fund commitment	Multi-sector	USD 24.8B to date
2025	New external managers. 28 managers hired from 858 reviewed, across public and private markets. S6	Fund commitment	Multi-sector	Not published

Case studies

Bond Guarantee Program: lending the fund's strength S1 S6 S9

What: The fund guarantees school district bonds so they borrow at its AAA rating.
When: Since 1984
Size: About USD 144B guaranteed in 2025
Why: To lower borrowing costs for Texas schools and taxpayers.
Outcome: Estimated savings of about USD 474M a year; 877 districts and 32 charter districts covered.

Texas First S6

What: Steers mandates to managers with a large presence in Texas.
When: 2024 to 2025
Size: USD 24.8B placed to date
Why: To support the Texas investment industry while meeting return goals.
Outcome: USD 10B placed since 2024.

Investment process

The nine-member board approves the asset allocation, benchmarks and risk policy and hires the CEO. Staff led by the CEO and CIO choose managers within that policy, with NEPC as investment consultant. S5 S3

Committee	Role
Audit and Ethics Committee	Audit and ethics oversight S3
Budget and Compensation Committee	Budget and pay S3
Strategic Planning and Policy Committee	Strategy and investment policy S3

The board sets a strategic allocation after a study every two years. S7
Staff screen managers through meetings and due diligence; in 2025 about one in 20 was hired. S6
Mandates and fund commitments are made within policy; a direct and co-investment team started in late 2025. S6
Results are reported to the board monthly and to the State Board of Education quarterly. S6

How to approach: No pitch portal is published. The contact page lists media and public information routes; managers are sourced by the investment team. S13

Size and returns

Headline size: USD 60.6B (Net assets or equity, as of 2025-08-31) S3
In US dollars: about USD 60.6B. Reported in US dollars.
Total assets: USD 64.0B (Total assets (balance sheet), as of 2025-08-31) S3
Fair value of investments: USD 60.1B (Fund market value, as of 2025-08-31) S3
Bonds guaranteed: About USD 144B (Published estimate, as of 2026-01-12) S6
Return, year to 31 August 2025: 8.2 percent (net of fees; benchmark 7.78 percent) S3
Return, 5 years: 7.95 percent a year S3
Return, 10 years: 7.4 percent a year S3
Size over time (USD billion): 2016 37.264, 2017 41.418, 2018 44.067, 2019 46.5, 2020 46.676, 2021 55.624, 2022 56.811, 2023 52.317, 2024 57.291, 2025 60.619 S3

Leadership

Name	Title	Since
Tom Maynard	Chair of the Board S5	Not published
Brad Wright	Vice Chair S5	Not published
Robert (Bob) Borden	Chief Executive Officer and Chief Investment Officer S11	Not published
Stuart Bohart	Senior Executive Vice President and Co-CIO S11	Not published
Jared Stout	SVP and Deputy CIO S11	Not published
Mike Meyer	SVP and Chief Financial Officer S11	Not published
Needhi Vasavada	SVP and Chief Operating Officer S11	2025-07
Lane Arnold	SVP and General Counsel S11	2025-06
Chris Eckerman	Vice President, Direct and Co-Investments S6	2025-12
Dawn Buckingham, M.D.	Board member; Texas Land Commissioner S5	Not published

Governance and transparency

Legal basis: Texas Constitution; corporation created by Senate Bill 1232 (2021), operating since January 2023 S3 S14
Oversight: Nine directors: five State Board of Education members, the Land Commissioner, one Land Commissioner appointee and two Governor appointees S5
Auditor: KPMG LLP; the State Auditor's Office audits the Bond Guarantee Program S3
Published certificate of formation, bylaws, board governance manual and Strategic Plan 2026. S14
Custodian and securities lending agent: The Bank of New York. S3

Transparency score: 9.5 of 10 (band 5 of 5). Our own 10-item rubric; see the methodology page.

Published: total assets, annual return, long-term returns, asset allocation, holdings or deal list, audited financial statements, governance and mandate documents, named leadership, regular reporting schedule. S3 S5 S7 S8 S11 S12
Partly published: geographic or sector split. S3

History

Date	Event
1845	Fund created by the first Texas Constitution. S1
1854	Seeded with USD 2M. S1
1984	Bond Guarantee Program begins. S1
2021	Legislature creates the Texas PSF Corporation. S1
2024-02-01	New strategic allocation takes effect. S3
2026-01-01	Revised strategic allocation takes effect. S7
2026-04-07	Moody's rates the guarantee program Aaa. S10
2026-08-20	Board approves USD 600M a year of supplemental payouts for 2028-29. S4
2026-09-03	S&P affirms AAA. S9

For family offices

Texas PSF has no programme for family offices. Its partners are external managers, with preference for firms with a significant Texas presence, and it is building direct and co-investment capacity. S6 S3

Managers can be hired for public and private mandates after due diligence. S6
Texas-based managers may benefit from the Texas First initiative. S6
Board meetings are public and recapped online. S12

Reports

Annual Comprehensive Financial Report fiscal 2025: https://texaspsf.org/wp-content/uploads/2026/06/2025-acfr-texas-permanent-school-fund-corporation_a11y.pdf S3
All public market holdings fiscal 2025: https://texaspsf.org/wp-content/uploads/2026/06/2025-all-public-market-holdings_a11y.pdf S8

Common questions

How big is the Texas Permanent School Fund?

Audited net position of USD 60.6 billion at 31 August 2025, with investments at fair value of USD 60.1 billion. S3

What does it return?

8.20 percent net of fees for the year to August 2025, 7.95 percent a year over five years and 7.40 percent over ten. S3

How much does it give to schools?

A record USD 4.8 billion for the 2026-27 biennium. S6

Who leads it?

Robert Borden is CEO and CIO; Tom Maynard chairs the nine-member board. S11 S5

Is it an IFSWF member?

No, it is not on the IFSWF members list. S2

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All sovereign wealth funds in North America · All sub-national permanent funds · All funds in United States

Sources

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