Oklahoma Teachers' Retirement System, Oklahoma City, will issue an RFP this week for a passive international large-cap equity manager to run $400 million to $450 million, said James Wilbanks, executive director.
Funding comes from the previous termination of a $400 million active international equity portfolio managed by Brandes Investment Partners. Mr. Wilbanks said the $11.8 billion pension fund decided to make the portfolio passive because it is using more of its fee and risk budget for international small cap, which was increased to 6% from 2.5% in June.
The RFP will be available on the plan's website. Mr. Wilbanks expects a hire within the next two months.
Separately, to boost the international small-cap allocation, the pension plan gave a total of about $288 million to existing managers Epoch Investment Partners, Wellington Management, Wasatch Advisors and Advisory Research, bringing their combined assets to about $713 million. Assets, which will be divided evenly among the managers, come from the March termination of a fixed-income portfolio managed by Stephens Capital Management.
The pension plan also moved $100 million in core fixed-income assets managed by Loomis Sayles, Lord Abbett and MacKay Shields to existing high-yield portfolios run by the same three managers.
Also, the pension fund reported returns of 17.4% net of fees for the fiscal year ended June 30, greatly surpassing the benchmark of 14.4%. Domestic equity returned 25.5%, passing the benchmark of 20.6%. It was aided by strong performances in midcap and small-cap equities at 27.7% and 29%, respectively.
Master limited partnerships returned 39.7%; international equity, 19.8%; high-yield fixed income, 11.1%; and core fixed income, 0.8%.
The pension plan returned an annualized 13.6% for the three years ended June 30; 7.3%, five years; and 8.5%, 10 years.
