Treasurer says moves to reducing fees, increasing in-house investing coming along
North Carolina Retirement Systems, Raleigh, committed $250 million to existing manager LBA Realty for a core industrial real estate separate account specializing in logistics and infilling, state Treasurer Dale Folwell said on a press call Tuesday.
Assets will come from a European real estate fund distribution. "It's just filling a hole in our portfolio," said Mr. Folwell.
It is the first hire since he became treasurer in January. Mr. Folwell, the sole trustee of the $96.1 billion pension fund, said the fund now has $10 billion in "uncalled capital."
In November, the pension fund began managing passive equities in-house. The internal index program started with $50 million in cash and $50 million reallocated from Piedmont Investment Advisers, which helped North Carolina make the change. The move to in-house management was the result of an initiative started under his predecessor, Janet Cowell, and former Chief Investment Officer Kevin SigRist, who resigned in July.
The system will begin searching for a new CIO in early January, said Mr. Folwell, along with a director of operations and several portfolio managers. "I have been very excited, 2018 will be a year of new faces," he said, adding that "I'm very happy and excited with the team I have, and where we are, but (I) see the need to start this process."
He noted that the pension fund has had seven CIOs in the last 13 years. "I'm not going to jump into making the wrong decisions," he said.
An initiative he began shortly after taking office to renegotiate manager fees is humming along, he said. "The whole tailwind from fee reduction is starting to manifest itself, and people are coming to us and saying, 'we think we can do this.'"