AMERICAS NEWS: Sticking to its guns

Steve LeBlanc stepping down as private markets chief of the Teacher Retirement System (TRS) of Texas this month, the question is whether the pension system’s famous ‘Texas Way’ of investing will continue. According to one of his successors, the answer seems to be a resounding yes.

LeBlanc’s mantle at the $110 billion pension system is being passed to Eric Lang, who will run TRS’ real estate activities, and Rich Hall, who will lead its private equity investments. For his part, Lang said he planned to maintain a sense of continuity with regard to TRS’ investment activities.

Lang told PERE: “There’s really going to be no material change. Steve, Rich and I worked very closely together and I was always in charge of the real estate programme, so I don’t see us making any dramatic changes. It’s working really well.”

The transition, according to TRS, has been a long time coming. LeBlanc, who broke the news about Lang heading up the state pension fund’s real assets activities at the PERE Global Investor Forum in Los Angeles in April, told delegates that the plan was always for him to leave after a few years and “turn the reins over” to Lang and Hall.

“I told Rich and Eric, ‘My job is to help you get my job,’” LeBlanc added. “I’m honouring that commitment to them and to my family.”

LeBlanc is stepping down after four years with TRS. At the Global Investor Forum, he gave an on-stage interview to explain the ‘Texas Way’, which is TRS’ style and method of investing in real estate and private equity utilising a premier list of managers. He noted that, since joining in September 2008, the private markets team has invested nearly $20 billion in 90 investments around the globe.

This year, Lang said TRS plans to allot about $2 billion to real assets. In 2013, the pension intends to reduce that amount to between $1 billion and $1.5 billion as it gets closer to its target allocation of 15 percent.
Up until now, Lang and Hall have reported directly to LeBlanc. Since LeBlanc’s position will not be filled, both men will now report directly to TRS’ deputy chief investment officer, Jerry Albright. “We’re eliminating that layer of management,” said Lang.

Meanwhile, LeBlanc is planning to return to the private sector to start a real estate firm, most likely in Austin where he currently is based. While the detail of that venture have yet to be worked out, this much is clear: he will be missed at the pension system.

Upon the announcement of LeBlanc’s departure on 10 April, TRS chief investment officer Britt Harris said:  “When a man as accomplished as Steve LeBlanc agreed to join us in the investment management division, I was very grateful and honored. At that time, Steve and I set out a five-year plan to greatly contribute to the long-term investment results of the TRS portfolio. The results of this highly successful programme speak for themselves.”