CalPERS’ investment committee is scheduled to discuss using leveraged bonds as a way to diversify risk in its entire portfolio, according to agenda documents for its Feb 16 meeting.
The discussion is part of the board’s incorporating risk analysis into its asset allocation study, said Clark McKinley, spokesman for the $202.1 billion system. The committee is not expected to adopt an allocation at the Feb. 16 meeting. However, the investment committee could direct staff to include leveraged bond analysis as part of the study.
Also at the Feb. 16 meeting, the investment committee is scheduled to decide whether to adopt new interim asset allocation targets.
The new targets would increase private equity one percentage point, to 15%, and inflation-linked portfolio assets two percentage points to 5%, and decrease global fixed income three percentage points to 20%. (To see a chart of current and proposed asset allocation, click here.)
The interim targets are for 2010.
TheCalifornia Public Employees' Retirement System, Sacramento, is conducting an asset-liability management review later this year, with a report expected in March and final recommendations on a new strategic asset allocation to the investment committee at its December meeting.
Separately, staff plans to issue an RFP for master custodian services no later than July with a contract start date of April 1, 2011, according to a report to the investment committee. Under a one-year extension, the contract of incumbent State Street Bank, would expire July 1, 2011.