San Jose (Calif.) Federated City Employees Retirement System and San Jose Police & Fire Department Retirement Plan are conducting a shortlist search for 18 to 20 absolute-return managers to run a total of $600 million to $800 million, said Carmen Racy-Choy, chief investment officer of both plans, in a telephone interview.
Alternatives consultant Albourne Partners, which was hired by the plans earlier this year, is creating the shortlist. Ms. Racy-Choy said interested absolute-return managers can contact Albourne about the search.
The $1.8 billion city employees plan and the $2.8 billion police and fire plan will select managers from all kinds of absolute-return strategies and will gradually make hires throughout the next year, Ms. Racy-Choy said. She added the plans' investment committees will start hearing recommendations from Albourne in August or September.
“We're going to have a little bit of everything,” Ms. Racy-Choy said, adding that multistrategy funds will likely receive a higher allocation.
Both plans will fund the mandate, but the search is a result of a new asset allocation at the city employees plan. Both plans previously had an unfunded 5% allocation to absolute return. The city employees plan's new asset allocation is absolute return 25%; fixed income, 10% from 25%; public and private equity and real estate, 45% from 60%; and real assets, 20% from 10%.
The police and fire plan has an asset allocation of 40% global equity; 25% fixed income; 10% each real estate and inflation-linked assets; and 5% each to private equity, absolute return and opportunistic investments.