Officials at North Carolina Retirement Systems, Raleigh, hope to increase the pension fund’s allocation to alternative investments and expand their internal investment staff, members of the investment advisory committee were told at their meeting Wednesday.
State Treasurer Janet Cowell, the $81.1 billion pension fund’s sole trustee, said that legislation allowing for a 40% alternatives portfolio was needed to get away from underperforming fixed-income investments.
“The math doesn’t work,” Ms. Cowell said in an interview. “We need to put it into something higher performing.”
Legislation allowing the change was overwhelmingly approved by the North Carolina Senate on May 6, and several House committees will address the legislation next week, committee members were told Wednesday.
The current asset allocation is 45.96% global equity, 34.38% fixed income, 7.7% real estate, 4.71% alternatives, 4% credit strategies and 3.25% inflation strategies.
Ms. Cowell said she was “cautiously optimistic” about winning final approval for the asset allocation change. Her proposal to add 12 additional investment staff was less certain, “but we hope we will get some,” Ms. Cowell said.
Kevin SigRist, chief investment officer for the pension fund, said at the meeting that the 28-person investment division staff is well below comparably sized systems. Mr. SigRist said his office will also be looking for ways to reduce $22 million in annual fees through internal management.