Oklahoma Teachers Retirement System, Oklahoma City, will reallocate $240 million from an active domestic large-cap value equity portfolio run by Hotchkis and Wiley to three current active domestic large-cap growth managers, said Tom Beavers, executive secretary. The $9.5 billion fund will add $80 million each to portfolios run by Aletheia Research and Management, Chase Investment Counsel and Sawgrass Asset Management, for a total of $210 million for Aletheia and $300 million each for Chase and Sawgrass. The Hotchkis portfolio will total $430 million.
We had a nice run-up by Hotchkis over a period of time, Mr. Beavers said. The move was just rebalancing back to our normal targets. The manager is on alert status for personnel changes made earlier this year and has performed below its benchmark in recent months, but the rebalancing was not really caused by performance, Mr. Beavers said. The plan will continue to monitor Hotchkis; the firm has performed well, but their style is out of favor at the moment, Mr. Beavers explained.
Separately, Loomis Sayles was cleared to include emerging market investments in its $360 million active domestic bond portfolio, an exception to the plans guidelines; overall international investments in the portfolio are limited to 20%.
Also, the fund will reallocate $75 million to the PIMCO Distressed Mortgage Fund from a $650 million core fixed-income fund, also run by PIMCO; the board had originally approved moving $100 million, but the mortgage fund is oversubscribed, Mr. Beavers said.