Oregon Investment Council, Tigard, which manages the $56.7 billion Oregon Public Employees Retirement Fund, Salem, created a new 5% allocation to real assets/real return investments, spokesman James Sinks said in a telephone interview.
The new allocation includes suballocations of 25% to 35% to infrastructure, 40% to 50% to natural resources and 15% to 25% to hedge funds that have a low correlation to equity markets. The natural resources subsector includes oil and gas, timberland, agricultural land and commodities.
The new portfolio will be seeded by moving $432 million of committed capital in three existing fund investments in the council's opportunistic portfolio — $100 million in Sheridan Production Partners, $132 million in Sheridan Production Partners II and $200 million in Alinda Infrastructure II — to the new portfolio.
The council will fund the move by reducing its public equity allocation by three percentage points to 43%, and fixed income by about two percentage points to 25%.
No decision has been yet made as to whether the new allocation will result in manager searches or terminations, Mr. Sinks said.
“As the OPERF evolves over the next several years to target the 5% to the alternatives, the percentages for fixed income and public equities will decline to accommodate,” he stated in an e-mail.