Hartford (Conn.) Municipal Employees' Retirement Fund committed a total of $38 million to five alternatives funds and allocated a total of $60 million to three investment strategies, said Gary Draghi, director of investments for the $1 billion defined benefit plan.
At its June pension commission meeting, the board committed $8 million apiece to Private Advisors Real Assets Fund II, a real assets fund; Riverstone Credit Partners II, a credit fund managed by Riverstone Holdings that focuses on stressed and distressed energy opportunities; Sound Harbor Credit Solutions Fund II, a credit fund managed by Allianz Global Investors; and VWH Partners, a private equity fund managed by VWH Capital Management.
The fund also agreed to commit $6 million to Basis Investment Group Real Estate Fund I.
The commitments to Private Advisors and Riverstone are follow-on commitments, while the rest are first-time commitments.
All of the commitments are subject to the successful completion of contract negotiations.
The fund also hired three active domestic equity managers, assigning each $20 million: Matarin Capital for a small-cap core strategy; Channing Capital Management, smidcap value equity; and Columbus Circle Investors, smidcap growth.
Funding will come from terminating SouthernSun Asset Management's smidcap value and Voya Investment Management's small-cap growth mandates, as well as rebalancing the pension fund's large-cap domestic equities portfolio.
SouthernSun and Voya were terminated because the pension fund implemented a more balanced structure in its small-cap and smidcap domestic equities portfolio, and neither firm fit within it, Mr. Draghi said.
NEPC, investment consultant to Hartford Municipal, assisted with the searches.