Texas Municipal Retirement System, Austin, will invest in equities for the first time, confirmed spokesman Bill Wallace. The $13.8 billion fund plans to allocate up to 12% of assets to passive equities by the end of 2008, half domestic and half international, reducing its fixed-income allocation to 88%, according to the result of a target asset allocation approved last month. A timetable was not immediately available. The board also discussed a five-year transition plan in which 60% of assets would be invested in equities, with the remaining 40% in fixed income. The fund hired its first investment consultant, R.V. Kuhns, in October to advise on a new investment policy and help implement the diversification of its portfolio.
City of Milwaukee Employes Retirement System might issue an RFP for a master custodian in the first quarter of 2008, said Tom Rick, chief investment officer of the $5.3 billion fund. Incumbent Northern Trusts contract expires in June, and the firm would be welcome to respond to the RFP, Mr. Rick said. The funds board would conduct the search to see what the marketplace has to offer for custodial services, he added. The board could make a decision at its Dec. 20 meeting.
San Diego County Employees Retirement Association made several asset allocation changes, based on an asset/liability study conducted by Ennis Knupp, said Johanna Shick, communications manager. The $8.5 billion fund reduced equities by two percentage points to 47% of assets, cut emerging market debt two points to 4% and cut high yield four points to 3%. It increased its low-risk asset category by four points to 22% of assets by adding 11 points to domestic fixed income to 17%, eliminating an 8% global fixed-income allocation, and increasing TIPS by one percentage point to 5%. The real assets category was increased four percentage points to 9% of assets by decreasing commodities one point to 4% and adding a 5% allocation to infrastructure. The 10% allocation to real estate and 5% to private equity were not changed. The board made the changes to reduce risk without affecting the portfolios total return. It has yet to decide how the new allocation will be implemented.
Tacoma (Wash.) Employees Retirement System will conduct an asset allocation study, confirmed Andrew Junkin, managing director at Wilshire Associates, consultant to the $1.3 billion system. Wilshire will conduct the study and present it at a board meeting Feb. 21. The last study was done three or four years ago. New asset classes will be evaluated, Mr. Junkin said, but he declined to provide any details. Patricia F. Pabst, the systems director, referred questions to Mr. Junkin.