University of California Board of Regents' investment committee approved on Tuesday a significant reduction to its fixed-income exposure to 20% from 65% in its $4.7 billion Total Return Investment Pool.
Other changes include a new 20% allocation to cross-asset-class strategies, a new 10% allocation to opportunistic equity, a new 10% allocation to global REITs, a new 10% allocation to absolute-return strategies and a 7.5% new allocation to emerging markets equity.
Marie N. Berggren, chief investment officer, vice president-investments and acting treasurer of the University of California, told the investment committee at a meeting in Los Angeles that exposure to fixed income in the total return fund was too large given the low-interest-rate environment, according to a webcast of the meeting.
The Total Return Investment Pool is available to UC campuses and the office of the president, and is designed maximize returns on long-term working capital.
The changes are expected to go into effect on Aug. 1.
The Total Return Investment Pool in the quarter ended March 31 returned 3.56% or seven basis points over its benchmark.
An investment report released at the meeting also showed that the $45.6 billion University of California Retirement Plan, Oakland, returned 3.95% or 40 basis points over its benchmark for the quarter ended March 31.
The General Endowment Pool, with assets of $7.2 billion, returned 4.58%, or 82 basis points above its benchmark, while the Short Term Investment Pool, with assets of $9.4 billion, returned 0.46%, or 42 basis points above its benchmark for the quarter.