Arizona State Retirement System Board, Phoenix, will add a 6% real estate allocation, under a new asset allocation that will be effective today. The $19.2 billion fund will also have 43% of assets in U.S. large-cap equities, down from 45%; 26% in fixed income, from 30%; 15% in international equity, from 17%; and 5% each in domestic midcap and small-cap equities, from 4% each, according to the board's asset allocation study report and the minutes from its last meeting.
The percentage of equity assets actively managed will increase. Large-cap equities will be 25% actively managed, up from 21%. Midcap will be 62.5% actively managed, up from 48%. Small cap will be 70% active, up from 65%. Some 70% of international equities will be actively managed, up from 58%.
On the fixed-income side, passive is increasing to 80% of bond assets, from 74%.
Plan officials have closed a search for a real estate manager and expect to choose finalists within the next two months; no managers are expected to be hired or terminated as a result of the changes, according to David Cannella, communications manager.
Mercer Investment Consulting assisted.