Oklahoma Teachers' Retirement System, Oklahoma City, will post an RFP on its website Friday for a master limited partnerships manager to run 5% of the system's $8.6 billion in assets, confirmed James Wilbanks, executive secretary.
The new investment is part of the system's recently approved asset allocation, which also makes official the system's separate 5% commitment to private equity and 5% commitment to real estate, Mr. Wilbanks said in a telephone interview.
In August, the system hired AEW, Heitman and L&B Realty Advisors to run a combined $425 million in the new real estate asset class. In October 2009, the system hired Franklin Park Associates as a private equity discretionary manager. Mr. Wilbanks said Franklin Park hire private equity managers to manage the 5% mandate with separate private equity investments over the next three years.
The new asset allocation will be funded with a 5% cut in large-cap/all-cap equities to 17.5%, a 5% reduction in domestic core fixed income to 25% and a 5% reduction in high-yield fixed income to 5%, Mr. Wilbanks said. He said the reductions would not result in terminations.
Mr. Wilbanks said he believes that bond yields will be in the low to mid-single digits for the foreseeable future, making it difficult for the system to achieve its 8% assumed rate of return.
“So we’re moving money into higher yielding real assets,” he said.
The RFP will be posted on the retirement system’s website at http://www.ok.gov/TRS/index.html.