Hawaii Employees’ Retirement System, Honolulu, hired three consultants, confirmed Rod June, chief investment officer of the $10.7 billion retirement system.
Pension Consulting Alliance was rehired at the board meeting last week as the pension fund’s general consultant, and Courtland Partners was rehired as real estate consultant. RFPs were issued in July.
The board also hired Altius Associates as the retirement system’s first private equity consultant. The board approved increasing the target private equity allocation to 7% from 3.5% in January 2010, and Mr. June said the pension fund plans on starting to increase its investments in that asset class now that the consultant is on board.
“It’s becoming a more complex asset class … and we felt we needed greater expertise in managing that asset class,” Mr. June said in a telephone interview.
Separately, the fund plans to issue two RFPs within the next two months for a passive large-cap domestic equity manager and two active large-cap domestic equity managers. The board terminated Goldman Sachs’ active large-cap mandate in October. The $593 million was moved temporarily to a Mellon Capital Management large-cap growth index fund and will be used to fund the passive search, Mr. June said. Mellon Capital also runs $1.4 billion in a passive global equity portfolio.
The active search will be for the current $460 million active large-cap fund currently run by Atalanta Sosnoff Capital, which is on the system’s watchlist for performance. Atalanta will be invited to rebid. RFPs will be posted on Pension Consulting Alliance’s website.
The board also reported the pension fund returned 5.45% for the fourth quarter ended Dec. 31 and -1.28% for calendar year 2011. The fund returned -6.38% for the first six months of the current fiscal year, which ends June 30.
Real estate and private equity had the best returns for the year ended Dec. 31 at 18.03% and 16.42%, respectively. Global fixed income returned 4.71%; domestic equities, -1.79%; and non-U.S. equities, -13.78%.
