Southern California Edison Co., Rosemead, hired State Street Global Advisors to manage a $100 million Russell 200 index portfolio as a result of an ongoing asset allocation review. The $2.9 billion pension fund was underweighted in domestic large-cap equities, said David Ertel, manager of investments. Funding came from reducing existing domestic equity allocations.
The plans current allocation is 45% domestic equities, 25% international equities, 26% domestic fixed income and 4% alternative investments, primarily venture capital and private equity, Mr. Ertel said. The fund hopes to complete the review by year-end and to implement recommendations next year.
The plan is examining benchmarks, active vs. passive exposures, style and capitalization exposures for each asset class, and currency management, he said. It also is reviewing international equities and considering whether to break out emerging markets as a separate asset class, and examining its international benchmark, the MSCI EAFE, 50% hedged for currency exposure. The plan currently has an emerging markets portfolio with Genesis, and it allows active international managers to invest a specified portion of their assets in emerging markets.
Frank Russell is assisting.