updated Nov. 30, 2011
Indiana Public Retirement System, Indianapolis, is searching for risk-parity managers to be put on a list for potential assignment, according to an RFI from the $23.5 billion system.
Indiana issued the RFI to create a list of risk-parity managers for bidding for potential assignment. The system plans to notify the managers of any RFP for risk-parity management that it might issue.
“INPRS is not interested in overlay strategies, but rather existing commingled risk-parity funds,” according to the RFI, available at www.in.gov/inprs/files/RFI11-09RiskParityManagers.pdf.
The timeframe for issuing RFPs “will be driven by what we learn from the RFIs,” Jeff Hutson, chief communications officer, said in an e-mail. “We do not yet have a specific timeline for RFPs”
The system plans to hire four to five money managers for the risk-parity strategy, allocating a total of 10% of the system’s $19 billion in defined benefit assets, Mr. Hutson said in the e-mail. “It is too soon to say how much each manager would be assigned,” he added.
Indiana wants to mitigate equity market volatility by “creating an efficient and well-balanced portfolio that is based on risk diversification” and “giving equal weight, on a risk-adjusted basis, to different asset classes,” according to the RFI.
Risk parity is part of an asset mix the retirement system adopted in October, providing an effective allocation of up to 118%.
Responses are due Dec. 16.
Strategic Investment Solutions, the system's investment consultant, recommended the risk-parity strategy.