Montana Board of Investments, Helena, approved weighting changes within its domestic equity portfolio that will result in shortlist searches, confirmed David Ewer, executive director.
The board, which oversees a total of $7.9 billion in retirement assets from nine separate pension funds, decided to move most of its large-cap allocation into passive management while increasing active management of midcap and small-cap holdings within the $3 billion domestic equity portfolio.
The allocation range for passive large cap increased to 45% to 70% from 10% to 30%; enhanced large cap was lowered to 8% to 12% from 20% to 30%; active large-cap value and growth to zero from 20% to 30%; and 130/30 strategies were reduced to 8% to 12% from 10% to 20%.
Active midcap target allocation ranges shift to 6% to 17% from 5% to 11% and small caps move to 3% to 11% from 3% to 8%. Currently 88.2% of the domestic equity portfolio is in large-cap strategies with only 23.2% of the portfolio in passive.
The board will conduct shortlist passive search “sooner rather than later,” Mr. Ewer said in a telephone interview. Investment consultant R.V. Kuhns will handle the process. There is also potential for midcap and small-cap searches, he added, although there is no timeline for those.
Mr. Ewer said the moves were made because of the efficiency in large-cap markets and the opportunity for greater return through active midcap and small-cap strategies.
