Michigan Municipal Employees’ Retirement System, Lansing, is searching for a money manager to run 5% of plan assets, or about $345 million, in an unconstrained opportunistic active global equity mandate, Jeb Burns, chief investment officer, said in an interview.
The investment will be the first unconstrained global equity allocation for the $6.9 billion system.
The search is being conducted by internal investment staff; interested bidders should contact Mr. Burns directly.
Funding will come from reducing the accounts of domestic equity managers, Mr. Burns said. No terminations are expected.
In the fourth quarter, investment staff will start the process of restructuring its $483 million, or 7%, allocation to high-yield bonds into an opportunistic fixed-income portfolio, Mr. Burns said. The move will enable the fund to invest in a broader range of credit opportunities, such as distressed debt, bank loans and leveraged loans.
Mr. Burns said his staff will make a presentation to the system’s board later this fall and a search for opportunistic credit managers likely will be launched in second quarter 2012.
Some of the fund’s core fixed-income managers have been given more flexible investment guidelines, allowing them to invest globally, for example, Mr. Burns said. The system’s core fixed-income portfolio represents about 23%, or $1.6 billion, of total fund assets.