Los Angeles City Employees' Retirement System issued an RFP for two managers to run a combined $275 million in active, long-only U.S. high-yield strategies.
The selected firms would run $137.5 million each in a high-yield fixed-income strategy that invests at least 85% of the assets in publicly traded corporate debt securities rated below investment grade and at least 75% of the assets in U.S.-domiciled companies, according to the RFP. The portfolios would be benchmarked against one of the Citigroup, Merrill Lynch or Barclays Capital U.S. high-yield bond market or issuer constrained indexes.
Funding for the portfolio would come from reducing LACERS' current domestic equity and bond portfolios.
Proposals are due July 9. Interview and contract-start dates have yet to be determined.
Wilshire Associates, the pension fund's general investment consultant, is assisting. The RFP is posted on Wilshire's website.
LACERS Spokeswoman Linda Aparicio could not be reached by press time.