Texas Teachers to Pull About $10 Billion From Private Equity (1)

Texas’ largest public pension fund has decided to shift almost $10 billion out of private equity investments, a blow to an asset class that has faced heightened scrutiny amid dwindling returns and a slowdown in exits for portfolio companies.

The move by the Teacher Retirement System of Texas — which manages $202 billion of assets — is another setback for an industry that has struggled with dealmaking and fundraising after a prolonged era of easy profits.

Texas Teachers is the second of the largest public pensions to officially reduce its target allocation to private equity. It’s paring that to 12% ...