Alternative Assets & Real Estate

Alternative assets

Alternative asset funds include investments that are not listed on a public exchange and are not easily accessible to most individuals. These investments range from initial capital in start-up enterprises to leveraged buyouts of mature corporations. Alternative assets typically represent long-term commitments to funds with durations that can range from eight to 12 years. Alternative assets are illiquid relative to publicly traded investments and when invested as part of a larger diversified portfolio have the effect of producing higher returns while reducing overall portfolio risk. 

The TRSL alternative asset program began in 1995 and is invested primarily in limited partnerships. The partnerships, which are managed by a general partner, acquire or create ongoing businesses or provide private debt financing for companies. Alternative assets include buyout, venture capital, mezzanine debt, distressed debt, infrastructure, commodities, and farmland investment strategies. Each of these sectors has different return attributes, and thus, will provide diversification benefits to the overall TRSL portfolio. 

Real estate

The TRSL real estate program is an externally managed selection of limited partnership fund investments intended to provide alternative portfolio risk characteristics when compared with stocks, bonds, and alternative asset investments. The TRSL partnerships in this asset class invest in high quality (core) and opportunistic real estate. The combination of steady income and the potential upside from appreciation combine to generate returns between fixed income and equities returns. The real estate portfolio is managed to deliver risk-­adjusted returns that are consistent with the long-term return expectations for the asset class.

 
Private Assets: Market Value and Returns (as of February 2021)
Account

Total Market Value ($)

in millions

Fiscal year Ending (%) 1-Yr Ending (%) 5-Yrs Ending (%) 10-Yrs Ending (%)
Total Fund 24,041 20.21 21.07 12.37 9.27
TRSL Policy Benchmark   19.74 22.16 12.58 8.92
           
Alternative Assets & Real Estate 8,696 11.67 10.53 11.22 11.45
TRSL Alternative Assets & Real Estate Benchmark 17.77 20.70 13.70 11.46
           
Alternative Assets 6,693 14.83 13.45 12.76 11.59
TRSL Alternative Assets Benchmark   24.77 27.86 15.96 12.07
           
Real Estate 2,003 2.16 1.66 7.05 10.85
TRSL Real Estate Benchmark   1.18 2.73 6.98 9.43
           
NOTE: Performance is net of fees. Slight rounding variance may occur.
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