Key Takeaways
- • David Kushner, CIO of the City of Austin Employees' Retirement System (COAERS) since 2022, has spent four years building the $4.2 billion pension's private markets infrastructure from scratch and presented the fund's first private equity recommendation to the board in late June 2026.
- • COAERS approved a new strategic asset allocation last year targeting 8% private equity, 10% private credit, and 15% real assets, representing a significant shift from the fund's previous focus on two open-end core investment vehicles in real estate and infrastructure.
- • The fund hired Albourne as its first private markets investment consultant in July 2025 and is actively evaluating managers across all four private markets verticals while currently using public market proxies—equities for PE, REITs for real estate, and bank loans for private credit—as funding sources for future capital calls.
- • COAERS' greenfield approach eliminates legacy portfolio constraints, allowing the fund to implement public market equivalents that will transition to private investments as allocations are approved and capital is deployed, creating a structured bridge between current holdings and future mandates.
Summary
The City of Austin Employees' Retirement System has completed nearly four years of foundational work to establish a modern private markets program, positioning itself to deploy capital across private equity, private credit, real assets, and infrastructure. David Kushner, who joined COAERS as chief investment officer in 2022, has overseen the build-out of institutional-grade infrastructure necessary for sophisticated alternative asset investing. According to Kushner, the extended timeline reflected the complexity of establishing a program that meets industry standards: "It's taken four years to get the first private equity recommendation to the board. We had a lot of pieces to put in place to build a state-of-the-art program. We needed consulting, we needed staff."
The fund's governance structure moved decisively last year to authorize meaningful allocation to alternatives. The board approved a revised strategic asset allocation that designates 8% to private equity, 10% to private credit, and 15% to real assets—a material repositioning for a $4.2 billion public pension. To execute this mandate, COAERS retained Albourne as its first dedicated private markets investment consultant in July 2025, signaling institutional commitment to professional manager selection and due diligence across multiple verticals.
The fund's starting position with no legacy private markets portfolio provides operational advantages relative to established pension systems. Currently, COAERS uses public market instruments as proxy holdings and funding mechanisms: equities substitute for private equity exposure, real estate investment trusts serve the real assets mandate, and bank loan positions track the LSTA index for private credit. This structure supplies "beta exposure" across all four asset classes while creating a defined capital source for future private investment calls. As managers are approved and capital is deployed, assets will systematically shift from these public proxies into the corresponding private mandates, creating a disciplined transition mechanism. The fund presented its first private equity recommendation in late June 2026, indicating that the infrastructure phase is substantially complete and deal activity is imminent.
The fund's governance structure moved decisively last year to authorize meaningful allocation to alternatives. The board approved a revised strategic asset allocation that designates 8% to private equity, 10% to private credit, and 15% to real assets—a material repositioning for a $4.2 billion public pension. To execute this mandate, COAERS retained Albourne as its first dedicated private markets investment consultant in July 2025, signaling institutional commitment to professional manager selection and due diligence across multiple verticals.
The fund's starting position with no legacy private markets portfolio provides operational advantages relative to established pension systems. Currently, COAERS uses public market instruments as proxy holdings and funding mechanisms: equities substitute for private equity exposure, real estate investment trusts serve the real assets mandate, and bank loan positions track the LSTA index for private credit. This structure supplies "beta exposure" across all four asset classes while creating a defined capital source for future private investment calls. As managers are approved and capital is deployed, assets will systematically shift from these public proxies into the corresponding private mandates, creating a disciplined transition mechanism. The fund presented its first private equity recommendation in late June 2026, indicating that the infrastructure phase is substantially complete and deal activity is imminent.
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