AutoZone Inc., Memphis, Tenn., is in the process of liquidating its $2.4 million hedge fund-of-funds portfolio as a result of asset allocation changes in its two frozen defined benefit pension plans, according to a recent 10-K filing with the SEC.
Further information about the hedge fund-of-funds portfolio could not be learned by press time.
Among changes in asset allocation approved by the plans' investment committee in August 2011, the fixed-income target was increased to 30% from 20%, funded by decreases in targets to domestic equity, to 30% from 35%, and international equity, to 20% from 25%. The plans have no specific target allocation to alternative investments.
The actual allocation to fixed income as of Aug. 25 — the end of its 2012 fiscal year — was 26.3%, compared to 17.4% a year earlier.
The company also announced it expects to contribute $9 million to its two frozen defined benefit plans in fiscal 2013. It contributed $8.7 million to its plans in fiscal 2012.
The plans had assets of $181.4 million as of Aug. 25, compared to projected benefit obligations of $305.2 million, for a funding ratio of 59.4%.
Phone calls to Brian Campbell, vice president-investor relations and treasurer, and Ray Pohlman, spokesman, were not returned by press time.