Ohio Police & Fire Pension Fund, Columbus, allocated an additional $200 million each to high-yield debt managers MacKay Shields and PENN Capital Management to invest in bank loans, confirmed spokesman David Graham.
The new allocations are the result of revised guidelines to allow high-yield debt managers to invest in bank loans.
The $13.1 billion pension fund previously had restricted managers' use of unregistered securities. Before the additional allocations, MacKay Shields managed $443 million in opportunistic high yield and $100 million in active core high yield, while PENN Capital managed $100 million in active core high yield.
The increased allocations are part of the pension fund's intention to fully fund its 15% target allocation to high-yield fixed income. As of July 31, the actual allocation was 10.9%.