San Mateo County Employees’ Retirement Association, Redwood City, Calif., has narrowed down a search for an opportunistic strategic credit strategy to six mangers and seven strategies, said a memo from general investment consultant Verus Advisory contained in agenda materials for the $3.6 billion pension fund’s Jan. 24 meeting.
Two strategies from Pacific Investment Management Co. are under consideration, PIMCO’s diversified income strategy and its income strategy. Other strategies under consideration are Brandywine Global Investment Management’s global multisector income strategy; Loomis Sayles & Co.’s world credit asset strategy; the Oak Hill Advisors Diversified Credit Strategies Fund; Oaktree Capital Management’s strategic credit strategy; and Wellington Management’s multisector credit strategy.
Verus said it is continuing its due diligence of the managers. A hiring date has not been decided.
In a separate memo, Chief Investment Officer Michael Coultrip said about $70 million, or 2% of the pension fund’s portfolio, will be allocated to the new strategic credit strategy. Mr. Coultrip said the pension fund is looking for a manager that invests across the credit spectrum, “using an opportunistic, top-down approach to sector allocation complemented by a bottom up-approach to security selection.”
The pension fund’s target allocation to opportunistic credit was increased to 6% from 5% in October.
The retirement system’s current opportunistic credit managers are Angelo Gordon & Co., Brigade Capital Management and Beach Point Capital Management.
Investment officials could not be reached for comment by press time.