October 12, 2025

TMRS Announces Major Investment in Co-Investment Opportunities

News Summary

The Texas Municipal Retirement System (TMRS) is set to invest $15 billion over the next five years in co-investment opportunities. This strategy aims to enhance their portfolio while significantly reducing management fees. By engaging more actively in private markets and partnering with global managers across diverse sectors, TMRS plans to capture valuable growth prospects. The move aligns with a growing trend among institutional investors seeking to improve returns through strategic co-investments. This initiative signals a new era for TMRS and its stakeholders, promising exciting prospects in the investment landscape.

Texas – The Texas Municipal Retirement System (TMRS) has announced its plan to invest up to $15 billion in co-investment opportunities over the next five years. This strategic initiative marks a significant shift in how the system allocates a part of its substantial asset base, which currently stands at $44 billion.

The investments will occur directly in private market transactions and will be executed in partnership with external fund managers. Each co-investment opportunity will range between $10 million and $200 million, focusing on various investment strategies including secondaries and growth capital investments. This proactive approach is designed not only to expand TMRS’s investment portfolio but also to strengthen relationships with external managers.

The Chief Investment Officer of TMRS highlighted the increasing appeal of co-investments due to their favorable fee structures and the potential for strategic opportunities. Recent data indicates a growth in TMRS’s co-investments from 5% to 9% of total private markets net asset value between January 2024 and June 30, 2024. Looking ahead, TMRS anticipates that these co-investments could constitute nearly 30% of its private market net asset value over the next five years.

The program will focus on managing investments globally across a diverse set of sectors including venture capital, buyouts, real assets, and structured equity. The selected investment areas will align with five overarching themes: digital transformation, healthcare innovation, energy modernization, and more. This targeted investment strategy reflects TMRS’s commitment to staying at the forefront of evolving market trends and investment opportunities.

This move follows a broader trend among institutional investors capitalizing on co-investment strategies to enhance net returns while significantly cutting costs. Notably, the California Public Employees’ Retirement System has recently relaunched its own co-investment strategy, predicting considerable long-term savings in management fees associated with its commitments.

The TMRS strategy is particularly noteworthy given the competitive landscape of investment management fees, which have increasingly pressured institutional investors to seek more efficient methods of portfolio management. By engaging in co-investments, TMRS aims to reap potential savings amounting to hundreds of millions of dollars annually, which can then be redistributed to optimize its existing financial commitments and enhance overall returns for its stakeholders.

Overall, the TMRS’s ambitious investment plan underscores its proactive approach to navigating the complexities of private capital markets. With this new strategy, TMRS not only aims to bolster its financial performance but also positions itself to leverage the growing opportunities in private equity and venture capital as part of a continually evolving investment framework.

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