Georgia Employees' Retirement System, Atlanta, is revising its placement agent policy as a result of its pending first move into alternative investments, said Jim Potvin, executive director.
The $14.5 billion pension fund's investment committee voted Aug. 15 to amend its general policy, which prohibits use of placement agents, because “a number of these general partners and fund managers don't have marketing arms” and, therefore, use placement agents, Mr. Potvin said in a telephone interview.
The pension fund's previous policy would have eliminated about 25% of the funds in which the retirement system is interested, Mr. Potvin said. Specific policies will be put into place to prevent undue influence on the part of placement agents, he said.
Mr. Potvin said the change in policy should allow the pension fund to make its first alternatives commitments before the end of this year. He did not have a timeline for when the revised policy will be adopted.
Georgia ERS was prohibited from investing in alternatives until legislation was passed in April 2012 allowing most public pension funds in the state to invest up to 5% in alternatives.
In December, the pension fund hired Camden Partners' Catharine Burkett and Delaware Investments' Ben Cahyono as co-directors of alternative investments to lead the new effort.