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Orange County Employees eliminates 14% absolute-return allocation

Orange County Employees Retirement System, Santa Ana, Calif., has adopted a new asset allocation that eliminates the 14% absolute-return allocation and decreases credit by 1 percentage point to 13%, said Robert Kinsler, spokesman for the $13.2 billion pension fund, in an email.

As of Oct. 31, OCERS had about $1.6 billion in absolute return, with $790 million in hedge funds and $791 million in global tactical asset allocation strategies.

At the same time, the new asset allocation also includes increasing private equity to 8% from 6%, core fixed income to 17% from 13%, real assets to 22% from 18% and risk mitigation to 5% from zero.

The real assets portfolio includes real estate and natural resources, and will possibly include infrastructure. The risk mitigation portfolio would include commodity trading advisers trend-following strategies and systematic risk premiums.

Investment consultant Meketa Investment Group is expected to present a timeline for reviewing each asset class in coming months.

Further information could not be learned by press time.