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INVESTING/PORTFOLIO STRATEGIES

Fresno City to slash equity allocation, add private equity, MLPs and infrastructure

Fresno (Calif.) City Retirement Systems adopted a new asset allocation that will decrease the equity portion of the plans to 48% from 60% by 2020, said Robert Theller, retirement administrator, in an email.

The plan includes new allocations to private equity (5%), master limited partnerships (5%) and infrastructure (4%) over the next four years. Real estate remains at 15% and private debt stays at 8%, while fixed income decreases to 15% from 17% over the four years.

“The changes are hoped to decrease the overall risk and volatility to the retirement plans and to create more return drivers,” Mr. Theller said in the email.

He said the $2.6 billion system is fully funded so the equity decrease is “to help protect the fund from equity drawdowns.”

Mr. Theller said the system has not set a timetable yet for the invitation-only RFP processes for the new allocations. He said the retirement system will work with consultant NEPC to determine them soon.