Being the best at what you do is listed as the most common goal for Fortune 500 companies, the U.S. military branches and every sports team you ever rooted for. At the Teacher Retirement System of Texas (TRS) we have applied this same goal to all we do. We are a $112 billion fund located in quiet Austin, Texas (except on Formula 1 weekend).

So in the fall of 2010, when our board asked how we could build the most robust and dynamic real estate emerging manager program on the planet, we quickly set out to be ... the best. This article is about what we have built in the past two years, as well as what we have learned and where I think GPs and LPs should be heading.

TRS already had some experience in the small manager space, having invested $650 million starting in 2005 in the private equity emerging manager market. By the end of 2010, TRS determined an additional $1 billion would be added t