Los Angeles City Employees' Retirement System's board is expected to review the fund's real estate asset allocation policy in April and might decide to invest more aggressively in value and opportunistic real estate, a fund spokesman said.
With only a 3% target asset allocation for real estate, the $6.15 billion fund now receives little diversification from the asset class and the board might decide to make a bigger play for increased yield, he said. The Townsend Group will assist.
Rhode Island State Investment Commission, Providence, is reviewing the structure of its $1.84 billion U.S. fixed-income portfolio.
The $5.5 billion fund is looking at a 50/50 split between core-oriented and specialty managers. Most of the portfolio now is passively managed by Fleet. The rest is in smaller core, short-term, mortgage-backed, high-yield and convertible mandates. Existing managers are expected to be used for the new mandates.
Also, the fund committed $10 million to Alta BioPharma Partners L.P. to invest in biopharmaceutical companies and $7.5 million to $10 million to Nordic Capital Fund III, which invests in buyouts of companies in the Nordic region. The funding will come from cash. Pacific Corporate Group assisted.
President Clinton's proposal to use a federal budget surplus to shore up the Social Security system, stated in last night's State of the Union address, captured the attention of some money managers and pension plan sponsors. But some observers say the proposal lacks substance.
William G. Shipman, a principal with State Street Global, said the president's emphasis on fixing Social Security is an indication that reform is coming soon.
Meanwhile, Earl White, director of trust investments for the $6.2 billion pension fund of Consolidated Edison Co., New York, said a trust needs to be established to fund Social Security's liabilities.
Gina Mitchell, a lobbyist with the Financial Executive Institute, said Mr. Clinton's proposal was a great idea and put retirement planning on the "front burner'' as a stand-alone issue.
But the president's proposal to use budgetary surpluses to shore up the teetering Social Security system lacked specifics, said Sylvester J. Schieber, director of Watson Wyatt Worldwide's Bethesda, Md., research center.
The president said that using the budget surplus for anything other than Social Security would endanger the system, but "he didn't say what he wanted to do," said Mr. Schieber, who was a member of the Social Security task force that last year presented its proposals.
Senate Finance Committee Chairman William V. Roth Jr., R-Del., said the crisis facing the Social Security system "needs more than an incremental response."