Texas Permanent School Fund

Texas Permanent School Fund

The Texas Permanent School Fund was established in 1854 with a constitutional mandate to support the state's public schools using revenue from sovereign lands. Unlike most educational endowments built on donor gifts, the PSF derives its corpus primarily from the proceeds of 13 million acres of Texas land and associated mineral rights — a structural link between natural resource extraction and K-12 funding unique among US states. The Texas State Board of Education governs the fund and determines annual distributions to school districts, while day-to-day investment management falls to the Texas PSF Corporation, led by CEO and CIO Robert Borden. The PSF allocates across a deliberately broad set of asset classes. Public equities and fixed income form a significant base, but the fund has increasingly deployed into private markets. Directly and through third-party managers, the PSF holds commercial, residential, and mixed-use property globally — fund commitments include Blackstone BioMed Life Science Real Estate, BentallGreenOak Asia IV, Ares US Real Estate Fund XI, and Clarion Gables Multifamily Trust. On the natural resources side, the fund retains mineral rights to oil, gas, and coal across Texas state lands and leases properties like the Round Top Project for rare-earth mining. Its private equity exposure extends to Growth Capital mandates, and a separate Bond Guarantee program backs school district debt to lower local borrowing costs. The PSF Corporation operates from Austin under the oversight of Chairman Tom Maynard. Total endowment assets sit north of $52 billion, making the PSF one of the largest educational endowments globally, ahead of the University of Texas/Texas A&M system's PUF and most Ivy League pools. The Texas General Land Office, led by an independently elected commissioner, manages the real property and mineral estate that still feeds the fund — a bifurcated governance model that separates resource stewardship from financial portfolio construction. The PSF does not raise outside capital or manage third-party funds; all returns flow to Texas public schools. The fund's structural differentiator is its dual-asset nature: it is simultaneously a land-and-mineral trust and a globally diversified investment portfolio, governed jointly by an elected board of education and a state land office. This architecture ties a $52 billion financial engine directly to the price of oil and the value of Texas dirt — a connection that boosts revenue in commodity upcycles but introduces volatility that peer endowments do not face. The 2021 creation of the PSF Corporation aimed to professionalize investment management separately from GLO land administration, a governance evolution still being observed by other sovereign long-horizon pools.