South Carolina Retirement boosts fixed income, cuts real estate and private equity

South Carolina Retirement System Investment Commission, Columbia, which oversees investment of the $25 billion South Carolina Retirement Systems, on Monday approved a new asset allocation that will increase fixed-income investments by six percentage points and decrease real estate and private equity allocations by a combined four percentage points.

The new allocation, effective July 1, will increase the total fixed-income target to 25%, confirmed Adam Jordan, interim CEO, in an e-mailed response to questions.

Changes within the fixed-income portfolio double the target allocation to high-yield/bank loans and emerging market debt to 6% each. A new 2% target to investment-grade credit was added, at the expense of global bonds, which was reduced to 1%. The core bond target allocation will stay at 10%.

Commodity investments will rise to 3% from 2%.

The target allocation to real estate dropped to 3% from 6% and private equity was decreased to 17% from 18%. Cash/short duration investments decreased to 7% from 10%.

Allocation targets remain unchanged for the equity (domestic and international) portfolio, 30%; GTAA risk parity, 10%; and hedge funds, 5%.

The new allocation will be added to the investment commission's draft 2012-2013 investment report, which will be reviewed for approval by commissioners at their April 19 meeting, said Allen R. Gillespie, the commission's chairman, in an interview.

Separately, Mr. Gillespie said advertisements for chief investment officer and director of operations positions will be posted on the state's employment website — as well as in Pensions & Investments, on job-search sites and other employment resources.

The commission voted on Jan. 19 to separate the joint CEO-chief investment officer position most recently held by Robert L. Borden, who resigned in December. At a Feb. 16 meeting, commissioners decided to change the CEO title and job description to director of operations.

Interim CEO Adam Jordan and interim CIO Hershel Harper Jr. could be considered for the positions within the search process, said Mr. Gillespie.