South Carolina lawmakers passed a bill Thursday enabling the $25 billion South Carolina Retirement Systems, Columbia, to raise its equity allocation to 70% of assets, from the current 40% cap. The bill awaits Gov. Mark Sanford's signature; he is expected to sign the bill.
If the bill is signed, the system's investment committee might, at a June 10 meeting, recommend raising the equity allocation to 50%, said Michael Sponhour, spokesman for the South Carolina Budget and Control Board, which oversees the pension fund. The full board would then vote June 14. Current equity managers would receive additional money in proportion to their existing allocations, Mr. Sponhour said.
The board also could vote on recommended allocations for new active domestic large-cap equity managers. The investment committee recommended that Legg Mason Capital Management get $346 million Sands Capital Management would get $328 million and WCM Investment Management, $578 million, each for growth portfolios; and Aronson + Johnson + Ortiz would get $500 million and Pzena Investment Management would get $347 million, both for value portfolios.
The investment panel also recommended terminating Montag & Caldwell, which manages $608 million in active domestic large-cap growth equities, because it "didn't fit in with the portfolio structure they see going forward," Mr. Sponhour said. That money will be reallocated among the new large-cap equity managers.
The bill, meanwhile, also consolidates authority in a new investment commission that would directly approve pension fund investments, instead of going through the budget and control board. The commission was given investment authority over both equities and fixed income; the state treasurer currently manages the fixed-income portion of the pension fund's investments. The bill also makes the state treasurer a member of the new investment commission, although not its chair.