Austin pension fund adds real assets, private equity, risk parity to investment corral
By Kevin Olsen | September 27, 2012 3:47 pm
Austin (Texas) City Employees' Retirement System added new allocations of 5% each to real assets, private equity and risk parity following an asset/liability study, confirmed Kirk Stebbins, chief investment officer, in an e-mailed statement.
The study was conducted by investment consultant Summit Strategies Group.
The $1.8 billion pension fund does not have a timetable for when searches will be conducted but doesn't expect to begin any before 2013, Mr. Stebbins said. Funding sources for the new mandates will be determined at a later date.
At an Aug. 17 investment committee meeting, Summit recommended a target allocation of 22.5% core fixed income, 20% domestic large-cap equity, 18.5% international large-cap equity, 8.5% domestic small-cap equity, 6% emerging markets, 5% each real estate, private equity, risk parity and real assets, and 4.5% international small-cap equity.
The pension plan's current target allocation is 30% core fixed income, 22.8% domestic large-cap equity, 21% international large-cap equity, 9.8% domestic small-cap equity, 5% each real estate and international small-cap equity, and the rest in emerging markets equity.
The investment committee discussions showed there was still little interest in hedge funds, Mr. Stebbins said.