Kentucky Teachers' Retirement System, Frankfort, is planning investments in opportunistic credit after it completes due diligence on the new strategy, confirmed Gary Harbin, executive director of the $13.3 billion system.
He said system officials have been studying the strategy for close to a year and aim to complete due diligence by the May 7 investments committee meeting.
“It's getting into areas that really haven't been there before because of the market conditions,” Mr. Harbin said in a telephone interview.
He said it still has not been determined how much the system would invest in credit opportunities or how the investment would be funded.
The system would likely work through consultant Ennis Knupp to find managers for the strategy, Mr. Harbin said.
Separately, Mr. Harbin said the system returned 20.9% for the year ended Dec. 31, beating its custom benchmark by 1.6 percentage points.
“We weren't surprised by the returns,” he said. “We have a good long-term philosophy that reduces risk and gets us our best returns with less volatility.”
The system's asset allocation as of Feb. 28 was 48.8% domestic equities, 28.8% domestic fixed income, 13.5% international equities, 3.2% real estate, 2.4% cash, 1.4% alternatives and 1.9% other.