Investments

The Trust Company invests, manages, and oversees approximately $165 billion in assets. Investments include cash-equivalent funds such as the Texas Treasury Pool and separately managed portfolios for various Texas state agency clients. The Trust Company oversees the state's two largest local government investment pools: TexPool and TexPool Prime. Moreover, the Trust Company manages twelve separate endowment funds with assets totaling approximately $5 billion. The endowment portfolios are invested across a broad spectrum of asset classes, ranging from traditional fixed-income and long-only equity investments to hedge funds, private equity, private debt, and real estate. The SWIFT portfolio is invested across a broad spectrum of assets as well, ranging from traditional fixed-income and long-only equity investments to hedge funds, private debt, and real estate. The TESTIF portfolio is invested in cash-equivalents as well as traditional and alternative fixed-income.

Endowments

The Trust Company manages twelve endowment funds. The funds are invested in a diversified manner designed to preserve the purchasing power of the funds' assets and provide a stable and growing distribution to beneficiaries.

The distributed funds are used by governmental entities to provide funding for health care, health education, higher education, and historic preservation. All funds are invested in accordance with the prudent person or investor standard.

The twelve endowments are:

  • Tobacco Settlement Permanent Trust Account
  • Permanent Fund for Rural Health Facility Capital Improvement
  • Permanent Hospital Fund for Capital Improvements and the Texas Center for Infectious Disease
  • Permanent Fund for Higher Education Nursing, Allied Health, and Other Health-Related Programs
  • Permanent Fund for Minority Health Research and Education
  • Permanent Endowment Fund for the Rural Communities Health Care Investment Program
  • Texas State Buildings Preservation 
  • Historical Infrastructure Sustainability Trust Fund
  • Texas Preservation Trust Fund
  • Permanent Fund Supporting Military & Veterans Exemptions
  • Permanent Fund Supporting Graduate Medical Education
  • Texas Financial Education Endowment

State Water Implementation Fund for Texas

The State Water Implementation Fund for Texas (“SWIFT”) was created by the 83rd Texas Legislature, Regular Session, and became effective once voters approved the constitutional amendment to fund the SWIFT with $2 billion from the Economic Stabilization Fund. The creation of the SWIFT and its requirements are set forth in Chapter 15 of the Texas Water Code. Funds in the SWIFT are used to subsidize financing costs for projects included in the State Water Plan developed and implemented by the Texas Water Development Board (TWDB). The balance of the SWIFT is expected to be drawn down over time; however, funds used for financing subsidies will ultimately be repaid to the SWIFT. The investment objective of the SWIFT is to preserve its purchasing power while maintaining sufficient liquidity to meet the needs of the TWDB.

Texas Economic Stabilization Investment Fund

The Texas Economic Stabilization Investment Fund (“TESTIF”) was created by Section 404.0241 of the Government Code to invest a portion of the Economic Stabilization Fund (ESF) balance for a slightly higher return than the state’s operating fund. The TESTIF has two primary performance objectives: 1) maintaining purchasing power; and 2) delivering returns in excess of short-term cash equivalents. Maintaining the TESTIF’s purchasing power means achieving net returns over a full market cycle that exceeds inflation.

TexPool / TexPool Prime

TexPool and TexPool Prime are local government investment pools created on behalf of Texas entities whose investment objectives are preservation and safety of principal, liquidity and yield consistent with the Public Funds Investment Act. TexPool and TexPool Prime currently provide investment services to over 2,000 local jurisdictions throughout this State.

TexPool Website (link opens new window): www.texpool.com

Treasury Pool

The investment objectives of the Treasury Pool are as follows:

  • Preservation of capital and protection of principal
  • Maintenance of sufficient liquidity to meet the state’s operating needs
  • Maximization of return

Interest rate risk is managed by maintaining a weighted-average maturity of no more than two years. The pool invests in a diversified pool of high credit quality, liquid assets primarily consisting of:

  • U.S. Treasury securities
  • Debt instruments of Government Sponsored Entities (including mortgage-backed securities)
  • Repurchase transactions
  • High quality corporate debt
  • Asset-backed securities

Related Link: BidTX. BidTX is an innovative and efficient way to invest in State of Texas time deposits. The program is designed to provide approved state depositories the opportunity to interactively compete for State of Texas investment dollars monthly in six-month maturities or semi-annually in one-year maturities.

Trusts & Custody

The Trust Company separately manages assets for various state agencies including the Water Development Board, Texas Housing Authority, Lottery Commission and the cigarette stamp tax escrow account.

These funds are managed to ensure safety of principal and to maintain sufficient liquidity to meet the agency's operating needs.