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Texas Economic Stabilization Investment Fund
Texas's oil and gas severance tax surplus fund, run by CIO Anca Ion, operates as a liability-aware pool with global real asset and absolute-return...
Texas Economic Stabilization Investment Fund
The Economic Stabilization Fund, created by voter amendment in 1988, captures a portion of Texas's oil and gas severance taxes to buffer the state budget against energy-price swings. Flows depend entirely on hydrocarbon revenue — when crude levies exceed a rolling threshold, the excess routes to Austin. Glenn Hegar, as Comptroller and chairman of the Texas Treasury Safekeeping Trust Company, sets the fund's strategic direction, while CIO Anca Ion translates that into portfolio construction. Portfolio Manager Brad Willis handles day-to-day execution under oversight from the Comptroller's Investment Advisory Board. Ion's team manages the corpus as a liability-aware pool, blending absolute-return-oriented public and private investments with real assets that hedge against the very energy exposure that funds it. The portfolio spans global real estate, infrastructure equity, private credit, hedge fund allocations, and special-situations commitments. The trust deploys both direct co-investments and fund commitments, sourcing through a network of institutional GPs. Geographic exposure stretches beyond the US into developed and select emerging markets, though specific foreign holdings are not publicly itemized. Asset allocation targets a liquidity profile matched to the state's potential drawdown needs during revenue shortfalls. As of 2023, the corpus had swelled to record levels — exceeding $24 billion including the Rainy Day Fund balances — driven by Permian Basin production. The Comptroller's office publicly re-examined investment guidelines in 2023, engaging the Investment Advisory Board on broader mandate parameters as the balance sheet outpaced historical drawdown scenarios. Anca Ion's Treasury Safekeeping Trust Company manages not only the stabilization fund but also pooled state agency cash and other Texas trust portfolios, making it the central prudential investor for Texas's liquid wealth. Brad Willis, an Austin-based CFA charterholder, manages the fund's daily positioning from the trust's offices. TESTIF is structurally distinct from most US state reserve funds. It operates as an amendment-mandated surplus pool with a dedicated investment staff inside the trust company, not as a commingled state pension account or a passive Treasury sweep. The governance design separates political oversight — the Comptroller and advisory board — from professional investment execution at the trust, a model that states seeking to professionalize their reserves increasingly study. The link to oil and gas tax inflows means the fund simultaneously hedges against and benefits from the same energy economy, creating a unique correlation profile that requires careful portfolio engineering.
General information
Firm type
Annuity / Liability / Surplus Fund
Year founded
1988
AUM
Undisclosed
Location
Region
North America
Country
United States
City
Austin
Corporate office
Austin, TX, United States
Principals
Glenn Hegar
Texas Comptroller of Public Accounts, Chairman of TTSTC
Anca Ion
Chief Investment Officer, Texas Treasury Safekeeping Trust Company
Brad Willis
Portfolio Manager, Texas Treasury Safekeeping Trust Company
Sector focus
Frequently asked questions
Who runs investment decisions at the Texas Economic Stabilization Investment Fund?
The Texas Comptroller of Public Accounts, currently Glenn Hegar, chairs the Texas Treasury Safekeeping Trust Company and sets broad investment policy. Day-to-day portfolio construction and manager selection fall to Chief Investment Officer Anca Ion and her team at the trust. Portfolio Manager Brad Willis executes tactical positioning. An external oversight body — the Comptroller's Investment Advisory Board — reviews performance and policy.
How does the fund source its capital?
The corpus builds from oil and gas severance tax revenues that exceed a legislated threshold. When crude and natural gas production taxes flow above the state's estimate, the excess transfers into the fund. This tie to hydrocarbon taxation makes the fund structurally dependent on Texas energy-sector health — precisely the risk it was designed to hedge against.
Is the Texas Economic Stabilization Investment Fund a sovereign wealth fund?
Functionally yes, though Texas does not label it as such. It shares features with sovereign stabilization funds — resource-linked funding, countercyclical budget stabilization, and a long-horizon portfolio run by a dedicated investment team. Its governance under the Comptroller and the Treasury Safekeeping Trust Company resembles the institutional architecture of permanent sovereign funds more than a typical state rainy-day account.
What asset classes does the fund invest in?
The trust invests across global real estate, infrastructure, private credit, hedge funds, and special-situations strategies. The portfolio blends absolute-return-oriented public and private mandates with real assets that provide inflation and commodity-exposure hedges. Portfolio Manager Brad Willis and CIO Anca Ion manage both direct co-investments and fund commitments rather than relying solely on external fund-of-funds structures.
How large is the fund right now?
Texas does not publish a real-time number, but the Economic Stabilization Fund — including its investable corpus — crossed $24 billion in 2023 amid surging Permian Basin production and elevated energy prices. That figure includes cash and invested balances. Separately reported fiscal-year statements provide a more precise breakdown of the invested portion versus the state's total rainy-day balance.
Does the fund participate in direct deals or only fund commitments?
The Texas Treasury Safekeeping Trust Company deploys through a mix of direct co-investments and primary fund commitments. CIO Anca Ion's team executes co-investments alongside institutional GPs in real assets and private credit, while also allocating to external hedge funds and special-situations vehicles. The trust does not publish a deal-by-deal roster, consistent with its posture as an institutional limited partner.
What is the fund's relationship to the Texas Treasury Safekeeping Trust Company?
The trust company is the investment manager for the fund. It handles portfolio construction, manager selection, and risk management for the Economic Stabilization Fund as well as other Texas state agency cash pools and trust accounts. The Comptroller — currently Glenn Hegar — chairs the trust as the state's chief financial officer, while CIO Anca Ion runs the investment team.
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