Kern County considering enhanced, factor-based index managers

Kern County Employees' Retirement Association, Bakersfield, Calif., is considering searching for enhanced index managers, and factor-based index managers, said Peter Tirp, chief investment officer of the $3.6 billion pension fund.

Mr. Tirp said he is beginning to investigate the possibility of increasing the pension fund's equity index exposure through enhanced and factor-based index fund strategies. Mellon Capital Management is the pension fund's sole passive equity manager, with a $240 million domestic equity portfolio. Interested managers should contact Mr. Tirp.

Separately, the pension fund will hire two active global equity managers to run $100 million each in active global equities following due diligence visits to three finalists in February and March. The three managers are Dodge & Cox, Sustainable Growth Advisers and Walter Scott & Partners.

Funding will come from the terminations of four managers as a result of the pension fund reducing targets to domestic equity to 19% from 23% and international equity to 18% from 22%. Those managers were J.P. Morgan Asset Management (JPM), which ran about $185 million in active international equities; T. Rowe Price Group, $145 million in active domestic large-cap equities; PanAgora Asset Management, $104 million in active domestic large-cap equities; and Fidelity Institutional Asset Management, $90 million in active international large-cap equities.

Following the global equity hirings, the pension fund will concentrate on private credit, for which a 5% target allocation was created, and then the pension fund will move on to real estate, where the target was increased to 10% from 5%.