Boeing Co., Chicago, is significantly increasing the alternatives exposure of its $41 billion pension plan to 20% of total assets, from 9%, said Mark A. Schmid, vice president-trust investments and CIO. The new target allocations are 6% of total assets each to private equity and real estate, 3% to hedge funds, 4% to global TAA and 1% to market neutral. The fund's actual allocations are 3% private equity, 3% real estate, 2% hedge funds and 1% market neutral.
Global TAA is a new asset class for the fund, and it will seek managers later this year, said Mr. Schmid. Boeing is also looking for a fourth hedge fund-of-funds manager to handle the additional money; the fund began its hedge fund investment program in mid-2004.
Reaching the target weightings could take years; for example, it will likely take four years for Boeing staff to double the private equity allocation, Mr. Schmid said. However, he said he is fairly confident that staff will be able to bring up the actual overall alternatives allocation to 15% or 16% by the end of this year.