Stanislaus County Employees to consider adding alternatives

Stanislaus County Employees' Retirement Association's board on Nov. 7 will hear staff recommendations from an asset allocation study conducted by consultant Strategic Investment Solutions that could see the addition of alternative asset classes, confirmed Rick Santos, executive director of the $1.4 billion Modesto, Calif.-based pension fund.

It is the staff's intent to present several portfolio options with different risk/reward characteristics, and the board is expected to vote on a potential new allocation.

Alternative asset classes to be considered are real estate, direct lending, commodities and infrastructure, Mr. Santos said in a telephone interview. The only alternatives asset class in which the pension fund currently invests is REITs, which has 1.5% of total assets.

The pension fund also has 41.4% in domestic equity, 37.1% in fixed income, 15% in international equity and 5% in emerging markets equity. The current target allocations are 57% equity, 40% fixed income and 3% alternatives.

Separately, the plan hired BlackRock (BLK) to run $20 million in global REITs. The previous manager, Invesco (IVZ), was terminated for performance, Mr. Santos said. Bill Hensel, Invesco spokesman, said the company does not comment on the actions of its clients.