Indiana Public Retirement targets $500 million to commodities
By Kevin Olsen | September 19, 2012 4:16 pm
Indiana Public Retirement System, Indianapolis, hired CoreCommodity Management to run $500 million, split evenly in two separately managed active commodities portfolios, according to a report to trustees of the $26 billion pension fund.
The investments bring the pension fund to its 8% target allocation for commodities. The separately managed accounts will be in CoreCommodity's High Energy I and Founders I strategies.
The pension fund issued an RFP in April.
Northern Trust Global Investments was also hired to manage 75% of the collateral in the pension fund's commodities accounts — $572 million in TIPS and $188 million in inflation-linked bonds.
Separately, the pension fund committed $50 million each to Encap Flatrock Midstream Fund II and Crescent Capital Group Mezzanine Fund VI. Commitments were previously made to the predecessor fund of both managers.
Also, the pension fund terminated the $139 million BlackRock (BLK) Global Aggregate ex-USD Currency Hedged Index Fund as well as the State Street Global Advisors Treasury Inflation Protected Securities Index and SSgA Global Ex-US Inflation-Linked Bond Index funds. SSgA managed $145 million total in both funds. The terminations were part of an ongoing restructuring of the overall pension fund portfolio.
Also, the board report showed the pension fund returned 0.68% for the fiscal year ended June 30. Global bonds, excluding inflation-linked, was the top performer at 1.61%, followed by private equity, 1.35%; global inflation-linked bonds, 1%; real estate, 0.42%; risk parity, 0.05%; absolute return, -0.16%; commodities, -0.73%; and public equity, -2.86%.