Texas School Fund Replacing BlackRock

The Texas Permanent School Fund has selected Dimensional Fund Advisors and Intech as its new money managers after announcing last month that it would terminate BlackRock’s management of $8.5 billion in assets.

Dimensional Fund Advisors will manage the largest share of assets, but the fund has not yet set allocation splits, according to a spokesperson for Texas Permanent School Fund (PSF). The spokesperson said the fund is working to select additional managers.

In March, the Texas PSF announced it would divest from BlackRock in the wake of a 2021 Texas law that restricts investments with companies that engage in so-called boycotts of the fossil-fuel industry. The money manager is on a list of financial companies that state Comptroller Glenn Hegar considers to deserve such a boycott.

BlackRock criticized Texas’ decision to end the two contracts with the firm, calling the move “reckless” and detrimental to the finances of the state’s schools and families. In response to a public records request, the Texas PSF said there were no costs and fees to terminate BlackRock as manager of assets, which include an international equity portfolio and a fund called the Navarro 1 Fund LLC.

The contracts are being terminated as of April 30, PSF said in letters to BlackRock last month.

The Texas PSF has more than $53 billion under management and uses those assets to support the state’s public schools.

Dimensional Fund Advisors, an Austin-based investment firm that has more than $670 billion under assets, didn’t immediately provide a comment. Intech is a West Palm Beach-based quantitative firm that spun out of global asset manager Janus Henderson two years ago. Intech didn’t immediately respond to a request for comment.

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