Connecticut Retirement Plans & Trust Funds, Hartford, is overhauling its roughly $6 billion fixed-income portfolio, adding inflation-linked bonds and emerging markets debt and naming 13 preferred managers to handle the money, pending contract negotiations, said Susan Sweeney, chief investment officer of the $20 billion system. Specific allocations have not been determined.
The system is moving $1.3 billion in domestic fixed income to core from core-plus; increasing its high-yield allocation to 17% of the domestic fixed-income allocation from 11%; moving its 10% allocation to emerging markets debt from convertible bonds; establishing a 3% allocation to inflation-linked bonds, and cutting its passive core fixed-income allocation to 3% from 6%. The remainder will stay in active strategies.
Ashmore, PIMCO, Citigroup and Bridgewater were named as preferred managers to run a total of roughly $600 million in emerging markets debt. Previously, Oaktree Capital handled convertibles.
Brown Brothers Harriman and Hartford Investment Management were named preferred managers for the inflation-linked bonds, a mandate that will total roughly $180 million, according to Ms. Sweeney.
Loomis Sayles, Oaktree Capital and W.R. Huff were retained as preferred managers for the high-yield allocation, Ms. Sweeney said. Another high-yield manager, Triumph Capital, was terminated last year in connection with the scandal surrounding Paul Silvester, former state treasurer. BlackRock, Wellington, Western and Phoenix were named preferred core fixed-income managers; all previously handled core-plus duties.