NJ Investment Plan, NM PERA Credit Allocation, Kansas Intl Equity Search

07 Aug

NJ Investment Plan, NM PERA Credit Allocation, Kansas Intl Equity Search

Last week Public Plan IQ attended the New Jersey pension meeting in which the FY 2017 Annual Investment Plan was approved.  The hedge fund allocation was cut by more than half, from 12.5% to 6%, with the 3.75% Equity Hedge Fund Strategy allocation eliminated, credit strategy allocation cut from 3.75% to 1%, and the hedge fund risk mitigating strategies 5% remaining unchanged.  Domestic equity target allocation saw the largest allocation increase from 26% to 30%, investment grade fixed income increased from 8% to 10%. Mandates approved at the meeting included: hedge fund of fund, direct lending and four global high yield mandates.  For full details of the NJ pension meeting, please see our news post.

New Mexico PERA released their credit allocation plan.  As a result of the Wilshire asset allocation study the credit allocation was increased from 6.5% to 15%. Under the eight-step allocation plan, existing mandates for high yield, bank loan and emerging market debt were increased.  Future mandates include $200 million to direct lending and, in accordance with the private market pacing plan, increase distressed debt from $129 to $517 million.

Two potential equity searches were reported this week.  Kansas PERS terminated a $440 million international equity mandate and approved the issuance of an rfp for a replacement manager. In the meantime, assets are being held passive and PCA will be conducting the search.  Meketa provided Illinois State Board an updated Asset Allocation Implementation Plan. On the schedule for December is “consider conducting a search for concentrated small cap equity managers.”

Research presentations added last week included from the Illinois State Board meeting multiple Meketa educational presentations: Private Debt, Emerging Markets Debt, and The Impact of Monetary Stimulus on Foreign and Domestic Bond Markets.  New Hampshire considered a manager Active and Passive Investing presentation.  Wilshire provided Dallas an Asset Allocation Education.  Orange County heard a private debt manager presentation on What Makes the Market Work.