HARTFORD, Conn. — The Connecticut Retirement Plans & Trust Funds 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.
Separately, the system selected Bivium Capital Partners, FIS Funds Management, Progress Investment Management and Capital Prospects as preferred managers for its Connecticut Horizon Fund, according to Robyn Belek, spokeswoman for the system. Contract negotiations with the three firms are under way and specific allocations have not yet been set. The system set up the Horizon Fund last year as an emerging minority-owned, women-owned and Connecticut-based manager program.