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Investing

Nebraska Investment Council shifts endowments’ equity allocations

Nebraska Investment Council, Lincoln, changed the structures of the equity portfolios of the endowments it oversees, Michael Walden-Newman, state investment officer, said in an email.

The council, which oversees $27 billion in total, at its meeting on Thursday voted to change the equity portfolios in the $874 million 50/50 Endowments and $425 million Health Care Endowment to give them similar exposures to domestic, international and global securities as the defined benefit plans it oversees.

The targets in the 50/50 Endowments will now be: domestic equity, to 19% from 25%; international equity, 8% from 10%; and global equity, 13% from 5%.

In the Health Care Endowment, the council changed the targets to: domestic equity. to 30.5% from 40%; international equity, 13% from 15%; and global equity, 21.5% from 10%.

The council also decided to move the endowments' international equity to an entirely passive structure. BlackRock (BLK) runs 90% of those portfolios passively for both endowments; the firm now will run those entire portfolios. Active manager Baillie Gifford, which runs $9 million and $6 million in active international equities, respectively, for the 50/50 Endowments and Health Care Endowment, was terminated.

Within global equity, the council moved to an entirely active structure. Dodge & Cox will now manage $39 million, up from $12 million; MFS Investment Management also will run $39 million, from $16 million; and Wellington Management will invest $14 million, up from $4 million. BlackRock was terminated from its $11 million passive global equity portfolio.

The managers and proportions for domestic equity remain unchanged. BlackRock runs 90% of that portfolio, now $117 million, passively, while Dimensional Fund Advisors runs a now-$13 million active portfolio.

The DB plans have targets to domestic, international and global equity of 27%, 11.5% and 19%, respectively.

Investment consultant Aon Hewitt Investment Consulting assisted.