Key Takeaways
- • Over 70% of the Teacher Retirement System of Texas's (TRS) hedge funds agreed to investor demands for cash hurdles in their fee structures, according to Pensions & Investments.
- • TRS led a campaign urging hedge funds to adopt cash hurdles, a fee term that ties performance fees to a minimum cash return before managers earn incentive compensation.
- • CIO Jase Auby said new fee models now cover around two-thirds of the fund's hedge fund exposure, per the publisher's coverage.
- • Industry commentator Andrew Beer reported that TRS has saved more than $500 million in fees over the period of its fee push, though the exact measurement window was not specified.
- • TRS's funded ratio was 77.5% in 2025, down slightly from 77.8% in 2024, according to the fund's financial highlights.
Summary
Pensions & Investments reports that the Teacher Retirement System of Texas (TRS) has secured fee concessions from more than 70% of its hedge fund managers after pressing for cash hurdles, a fee provision that requires managers to clear a minimum cash return before collecting incentive fees. The article frames the outcome as a successful pushback by a large public plan against standard hedge fund fee terms.
According to the publisher's coverage, TRS made waves earlier in the year by leading a campaign calling on hedge funds to implement cash hurdles. Chief Investment Officer Jase Auby said the new fee models now apply to around two-thirds of the fund's hedge fund exposure. The publisher describes TRS as pioneering efforts to change hedge fund fee structures, and the push is part of a broader effort by the plan to reduce costs associated with its alternative allocations.
Commentary from industry observer Andrew Beer indicates that the fund has saved more than $500 million in fees through this effort. The figure is cited as a commentator's estimate, and the specific time period it covers is not clearly stated in the available material.
TRS is the fifth-largest U.S. public pension fund by the publisher's description. Its funded ratio was 77.5% in 2025, compared with 77.8% in 2024, according to the fund's financial highlights. For allocators, the story illustrates that large public plans with scale can negotiate fee terms with hedge funds, and that cash hurdles are gaining traction as a standard investor demand.
According to the publisher's coverage, TRS made waves earlier in the year by leading a campaign calling on hedge funds to implement cash hurdles. Chief Investment Officer Jase Auby said the new fee models now apply to around two-thirds of the fund's hedge fund exposure. The publisher describes TRS as pioneering efforts to change hedge fund fee structures, and the push is part of a broader effort by the plan to reduce costs associated with its alternative allocations.
Commentary from industry observer Andrew Beer indicates that the fund has saved more than $500 million in fees through this effort. The figure is cited as a commentator's estimate, and the specific time period it covers is not clearly stated in the available material.
TRS is the fifth-largest U.S. public pension fund by the publisher's description. Its funded ratio was 77.5% in 2025, compared with 77.8% in 2024, according to the fund's financial highlights. For allocators, the story illustrates that large public plans with scale can negotiate fee terms with hedge funds, and that cash hurdles are gaining traction as a standard investor demand.
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