The Employees Retirement System of Texas (Texas ERS) has made a series of new commitments across private equity and real estate as it continues to build and maintain its allocation to private assets. The pension fund committed $50 million to Arlington Capital Partners VII, the Washington, D.C.–based firm’s latest flagship fund, which recently closed at $6 billion after less than five months of fundraising. The strategy focuses on investments in aerospace and defense, government services and technology, and healthcare—sectors Arlington has long specialized in. 

Other notable institutional investors in the fund include the Virginia Retirement System ($175 million), New Mexico State Investment Council ($100 million), Contra Costa County Employees’ Retirement Association ($40 million), and the San Antonio Fire & Police Pension Fund ($25 million). 

Texas ERS also expanded its private equity program with two co-investments totaling $90 million, managed by undisclosed firms—reflecting the system’s continued use of co-investments to enhance returns and reduce fees. 

On the real estate front, the pension committed $4.7 million to the Madison Preferred Equity Facility managed by Madison International Realty, adding to its exposure through a structure that provides downside protection while preserving yield. 

Texas ERS, which oversees $44 billion in assets, returned 9.5% for the year through September 30, slightly under its 9.7% benchmark. The pension fund remains near its long-term allocation targets, with 16% allocated to private equity and 10% to real estate, both essentially in line with policy objectives.