Orange County Employees Retirement System, Santa Ana, Calif., approved $190 million in commitments to commodities and a real return fund.
The board of the $8 billion system committed $70 million to PIMCO to run in passively managed commodities, with BlackRock designated as the alternate if contract talks with PIMCO fail; $70 million to Schroder Investment Management North America to manage in active commodities; and $50 million to Wellington Management for its Diversified Inflation Hedges Fund, a real return fund. Funding for the three investments will come from reducing the systems $700 million TIPS portfolio managed by BGI and PIMCO. The board is switching to a real return portfolio that currently includes TIPS, timber and commodities from a strictly TIPS portfolio, she said.
Also, Clifton Group Investment Management was hired to run a new cash overlay mandate, with Standish Mellon Asset Management designated as an alternate. System officials have not as yet determined the programs notional value, said Shanta Chary, CIO.
Separately, the systems board decided to move the funds $576 million domestic core separate account real estate portfolio to commingled fund structures over five years. Funding will come from sale of properties in portfolios run by American Realty Advisors and CB Richard Ellis, Ms. Chary said. Board members are making to move to gain access to more real estate strategies and a greater array of property types.