Indiana Public Retirement System earmarks $50 million for buyout fund

Indiana Public Retirement System, Indianapolis, committed $50 million to Brentwood Associates Private Equity V, a middle-market North American buyout fund, said David Cooper, chief investment officer, at a meeting of the pension fund’s board Friday.

INPRS previously committed $30 million to Brentwood IV.

Also, Pacific Investment Management Co. was terminated from two fixed-income portfolios, $30 million in core and $20 million in emerging markets. Mr. Cooper said the terminations were the result of a restructuring of the pension fund’s 20.9% non-inflation-linked fixed-income allocation and was not because of performance. It has not been determined where the assets will be reassigned.

Separately, the pension fund’s assets totaled $28.6 billion as of Jan. 31, up 5.9% from the start of its fiscal year on July 1. Its investments returned 5.86% for the seven months ended Jan. 31, 194 basis points above its custom benchmark. The pension fund’s 23.2% global public equity allocation had the highest return among its main asset classes, at 12.01%; inflation-linked fixed income, with 9.7% of total assets, and cash, with 2.1%, had the lowest returns, returned 1.1% and 0.06%, respectively.

Steve Russo, executive director, told the board that an RFP for an external service provider for INPRS’ $5.6 billion annuity savings account program is still open despite a state Senate bill that would bar the pension fund from having the ASA managed externally.

The bill would make annuity rates of return adjustable twice a year, on April 1 and Oct. 1, based on the 10-year Treasury rate plus 1.5 percentage points. Currently, the ASA is internally managed with a fixed 7.5% return rate.

The bill will be considered next week, and if passed will need to be reconciled with a House bill that would bar external ASA management for five years.

The ASA provider RFP is on the pension fund’s website. Proposals are due at 3 p.m. EST Feb. 27, and a selection is expected the week of April 7, according to the RFP.