Arkansas Teacher Retirement System, Little Rock, committed up to $105 million total to three alternatives managers and terminated its largest active domestic equity manager, said George Hopkins, executive director.
The $13.1 billion pension fund committed up to $50 million to Brevan Howard Master Fund, a global macro hedge fund managed by Brevan Howard Asset Management. It also committed $30 million to Torchlight Debt Opportunity Fund IV, an opportunistic real estate debt fund managed by Torchlight Investors; and $25 million to Lime Rock Resources III, a private equity energy fund.
The pension plan invested in two prior Torchlight debt funds; the commitments to the other two managers are firsts.
Separately, the pension plan terminated a $460 million active domestic equity portfolio managed by ICC Capital Management because of organizational issues, Mr. Hopkins said in a telephone interview. The assets will be parked in a passive BlackRock domestic equity strategy. The assets are expected to be drawn upon for future alternatives investments as the board also approved at a Monday meeting a new asset allocation that decreases the U.S. equity allocation to 20% from 25%.
Under the new mix, the pension fund has a 15% allocation to real assets, which includes real estate, timber, farmland and infrastructure. Previously, it had separate allocations of 10% to real estate and 5% to alternatives. Also, a new 5% allocation was created to opportunistic/alternatives, which includes the pension plan's hedge fund investments.
The rest of the allocations remained the same — 30% global equity, 20% fixed income and 10% private equity.
Investment consultant Hewitt EnnisKnupp recommended the new asset allocation.