Indiana State Teachers' Retirement Fund, Indianapolis, selected new equity allocations for its $1.2 billion in defined benefit assets, and chose investment option styles for its $2.5 billion annuity savings account. The fund will invest in stocks for the first time following a change in the state constitution allowing it.
Allocations for the DB part of the fund are 36% U.S. equities, 10% non-U.S. equities, 6% REITs and 48% fixed income. Debt managers will be able to dip into non-U.S. and high-yield bonds, up to 10% in each type.
The annuity savings account, technically is part of the DB plan but is run like a defined contribution plan. Options available will be large-cap equities, small-cap to midcap equities, non-U.S. equities, a stable value fund and a bond fund.
Robert Newland, investment officer said RFPs for managers likely will be sent out in November or December. Trustees would like to use the same managers for both parts of the plan. Callan Associates assisted.
Office & Professional Employees, Local 153, New York, will be adding a 10% international equity allocation to its defined benefit fund's asset mix.
The change follows an asset allocation study done by Callan Associates. Funding for the new asset class will come from domestic equity and fixed-income managers, none of which will be terminated, said George Bueno, director of the $216 million fund. The rest of the new allocation is 48% U.S. stocks, 32% U.S. bonds and 10% real estate.
Trustees will meet in November to discuss implementation of the new asset allocation.
Mesirow Asset Management will establish a small-cap limited general partnership by the end of the year using its small-cap value strategy. The company intends to eventually offer a mutual fund with the same strategy.
The commingled vehicle will be offered to accommodate institutional investors too small to afford a separate account, said Kenneth S. Grossman, executive vice president. The company will cap the total amount under management in the small-cap strategy at $500 million, said Mr. Grossman.