Indiana Public Retirement System hired three managers to run a total $3.1 billion in short-duration fixed income and terminated six managers' portfolios running a combined $2.3 billion, according to a report to trustees of the $24.1 billion Indianapolis-based pension fund.
Logan Circle Partners will manage $1.1 billion; State Street Global Advisors, $1 billion; and Reams Asset Management, $967 million.
The terminated managers are BlackRock, cut from both a $691 million short-duration fixed-income portfolio and a $392 million core fixed-income portfolio; SSgA, for a $466 million Russell 1000 Index fund; Prudential, for a $290 million short-duration fixed-income portfolio; Wellington Management, for a $193 million active emerging markets equity portfolio; Martin Currie, for a $165 million active international equity portfolio; and Hughes Capital Management, for a $152 million core fixed-income portfolio.
The pension fund also made reductions to some portfolios: $300 million was cut from a BlackRock MSCI EAFE index fund, leaving it with $583 million; $284 million was taken from a RhumbLine Advisers Russell 200 index fund, leaving it with $635 million; and $258 million was taken from a cash transition account.
Strategic Investment Solutions, the pension fund's investment consultant, assisted with the changes.
The moves were made to save on fees and reduce the number of managers as well as to restructure assets of so-called guaranteed funds into a short-duration fixed-income portfolio. The restructuring consolidated the $2.1 billion guaranteed fund of the $15.3 billion Indiana Public Employees' Retirement Fund and the $1.9 billion guaranteed fund of the $8.7 billion Indiana Teachers' Retirement Fund.
The new INPRS guaranteed fund is an investment option participants can choose for a mandatory contribution they make to supplement their defined benefit payments. INPRS made the changes after the “2008 market collapse drove a comprehensive review” of the guaranteed funds, according to the report.
INPRS oversees the Indiana Public Employees' Retirement Fund and Indiana Teachers' Retirement Fund.
