Massachusetts Pension Reserves Investment Management Board, Boston, on Thursday approved adding non-core holdings and international developed markets investments to its 10% real estate allocation.
Also, the board, which oversees $53.2 billion, will allow joint venture investments in timber and allow timber managers to invest internationally, up to a 10% limit, according to meeting documents. The board has a 4% allocation to timber and natural resources combined.
The changes were recommended by real estate investment consultant Townsend Group, which “believes the changes will allow PRIM's managers the ability to better execute in the current real estate and timber markets along the risk/return spectrum and continue investing in the future in a manner that allows for increased flexibility and execution,” according to the documents.
Non-core real estate will have a 10% target and 15% cap within the real estate portfolio, and developed markets investments will have a target of up to 10% of the portfolio.
Also, real estate equity investments will now be capped at $250 million, from $150 million, to give managers access to larger transactions.
Separately, the board approved hiring FIS Group to run $100 million in active international equities as part of the board's emerging manager-of-managers program, and Clifton Group to manage a cash overlay strategy, confirmed Eric Convey, MassPRIM spokesman.
The board's investment committee recommended the hirings at its July 23 meeting.
Also, Attucks Asset Management and Bivium Capital Partners were named as standby managers for domestic small-cap equity, and Progress Investment Management for core fixed income. The three firms will be on what the investment committee referred to as an emerging manager-of-managers “bench” from which investment staff will have discretion to hire as needed.
The board has $9.9 billion in international equity, or about 19% of total assets.
Clifton Group would manage an undetermined amount in the cash overlay strategy. Other finalists were BNY Mellon Asset Management, State Street Global Markets and Russell Investments.
