State Retirement and Pension System of Maryland, Baltimore, could add at least four new managers next year as a result of a recent asset allocation study. The $31.2 billion system's in-house staff will begin searching next year, said Steven C. Huber, CIO. "We'll consider existing managers, but I think we'll open it up," he said.
Fund officials are considering searching for managers to run $3.12 billion in global equities; $1.3 billion in enhanced indexed equities; $600 million in inflation-indexed bonds; and $300 million in active microcap/small-cap international equities. They expect it will take six to eight months to add the asset classes and bring the new managers on board.
The system's total equity allocation remains at 65%, fixed income stays at 30%, and real estate is unchanged at 5%.
Funding for the global equity exposure will come from the domestic and international equity portfolios, and funding for the microcap/small-cap allocation will come from international equities. Funding from the enhanced indexing will come from domestic equities, while funding for the inflation-indexed bonds will come from the fixed-income portfolio.
"We think that a conservative portfolio is the best way to go in the current environment; when risk becomes lower priced, then that is the time to go into those assets," said Mr. Huber. For now, the pension fund has decided to stay away from hedge fund investments, he added.
Investment consultant Ennis Knupp assisted with the asset allocation review.