Rusty Guinn, Key To KKR, Apollo Relationships, Leaves Texas Teachers’

A key person at Texas Teachers’ Retirement System in charge of its much-discussed separate accounts with Kohlberg Kravis Roberts & Co. and Apollo Global Management has stepped down to join the private sector, according to sister publication Buyouts.

Rusty Guinn, director of strategic partnerships and opportunistic investments at the $114 billion pension fund—someone who reported directly to Chief Investment Officer Britt Harris—has left to join Houston-based Salient Partners, a multi-asset manager that oversees more than $17 billion. Guinn started working at Salient Partners at the beginning of March. Joining him there will be departing Texas Teachers’ staffer Todd Centurino, a senior investment manager for external public markets and hedge funds.

In an interview with Buyouts, Guinn said he left his strategic partnership portfolio “in very good hands,” adding that most of the “heavy lifting” of hashing out the terms of investments for the separate accounts was done on the front end. That process, he said, is largely finished. Guinn, who had worked at Texas Teachers’ for more than three years, was responsible for managing more than $11 billion of the pension’s capital.

It isn’t clear who Guinn’s replacement will be, or how his departure affects the pension’s relationships with KKR and Apollo. Guinn said the pension’s main point of contact with KKR and Apollo was his deputy, Courtney Villalta, a senior investment manager in the strategic partnership group.

A representative for Texas Teachers’, Juliana Fernandez Helton, said she was unable to provide any additional information about who Guinn’s replacement is, even on an interim basis.

The separate accounts, in which Texas Teachers’ pledged $3 billion each to Apollo and KKR in late 2011, were the first of their kind. The investments were meant to take advantage of the wide variety of opportunities offered by the two mega-firms.

In addition, these special relationships were formed to leverage the pension’s ability to commit huge sums of money in exchange for better terms and the possibility of opportunistic investments that had Texas Teachers’ uniquely in mind. The two firms were accorded special recycling provisions that allowed the pension fund to have distributions re-invested at a reduced cost.

But designing the exact terms of the investments has taken time, and only recently have the specifics of the more “opportunistic” investment funds been hashed out. As Buyouts reported this month, a surprisingly large amount of money from the $6 billion pledged to the two firms was invested in regular commingled funds—more than half of the money that has so-far been committed and much more than the opportunistic investments that were the deal’s hallmark.

Gregory Roth is a senior editor at Buyouts Magazine. Any opinions expressed here are entirely his own. Follow him on Twitter @RothReuters. Follow Buyouts tweets @Buyouts.

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