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Pension Funds

North Carolina returns 10.6% in fiscal year, names interim investment directors

North Carolina Retirement Systems, Raleigh, returned a net2.7% in the quarter and 10.6% for the fiscal year ended June 30, according to preliminary results.

State Treasurer Dale Folwell also announced Tuesday that Jeff Smith, director of fixed income, and Christopher Morris, director of risk management and asset allocation, will serve as interim directors of the investment management division. They are overseeing the $93.9 billion pension fund following the July 21 resignation of Chief Investment Officer Kevin SigRist.

For the systems' fiscal year, public equity led the investment gains, at 19%. Other returns were multistrategy at 12.9%; inflation-sensitive, 11.1%; opportunistic fixed income, 10.9%; non-core real estate, 10.8%; private equity, 9.5%; and core real estate 8.2%. Fixed income returned -0.3%.

Annualized returns for the fund were 4.5% for three years, 7.7% for five years, 5.1% for 10 years and 6.8% for 15 years. The current asset allocation is 52.4% growth, 34% rates and liquidity, 11.7% inflation sensitive and diversifiers, and 1.9% multistrategy.

Mr. Folwell said in a statement that the fund achieved its highest valuation ever during the second quarter. "In this low-interest-rate environment, we are pleased our funds did so well, while at the same time, the pension fund as a whole had less exposure to risk." Efforts to reduce manager fees have already resulted in more than $60 million in cuts, he said.