Maine Public Employees pension fund hikes alternatives targets at expense of equities
By Rob Kozlowski | December 18, 2012 2:19 pm
Maine Public Employees Retirement System, Augusta, increased its targets to alternatives and reduced its domestic and international equity targets as the result of an asset allocation study, confirmed Andrew Sawyer, chief investment officer.
The $10.9 billion pension fund is increasing its target allocation to real assets to 25% from 15%, and private equity to 10% from 5%. The real assets target consists of targets of 10% each to real estate and infrastructure and 5% to hard assets.
Mr. Sawyer wrote that the new targets will be funded over the next three to five years; the pension fund doesn't issue RFPs and instead conducts shortlist searches.
Funding will come from cutting the targets of domestic and international equity to 20% each, from 30% and 25%, respectively.
Mr. Sawyer wrote that the pension fund's total domestic and international equity allocation is in index funds and no managers will be terminated.
Fixed income remains unchanged at 25%.
The pension fund's current actual allocation is 36.2% domestic equity, 28.6% fixed income, 23.6% international equity, 7.4% real assets, 2.9% other, 1.1% private equity and 0.2% cash. Mr. Sawyer noted the allocation to private equity reflects invested capital, not committed capital.
Strategic Investment Solutions is the pension fund's general investment consultant, Cliffwater is the private equity and infrastructure consultant, and ORG Portfolio Management is the real estate consultant.