The City of Milwaukee Employes’ Retirement System is considering searches for managers for global tactical asset allocation and extension strategies, its first move in the areas, said David Silber, chief investment officer.
The retirement system, which oversees $4.7 billion in defined benefits, asked Callan Associates, its investment consultant, to develop a search implementation plan to take to the retirement system’s board for its Dec. 5 investment committee meeting, Mr. Silber said.
If approved, the board plans to work with Callan to develop in the first quarter of the next year a shortlist of manager candidates to consider hiring for the new allocations, Mr. Silber said.
The retirement system won’t do an RFP, Mr. Silber said.
“Managers interested in the search need not contact (the retirement system) or Callan for inclusion unless they are not currently in the Callan manager database in which case they should reference Callan’s website for more information on completing the Callan database questionnaire,” Mr. Silber said in an e-mail.
“Extension strategies is the term Callan and (the retirement system’s) staff are using to describe manager strategies with low beta compared to the public equity and fixed-income markets,” Mr. Silber said in the e-mail. “Along with the low correlation, the (retirement system) is focusing on strategies that use absolute-return benchmarks but excluding hedge funds of funds. A 130/30 strategy would not likely be included because these types of strategies typically have a beta close to 1 when compared to public equity markets.”
The moves are part of a 5% combined allocation to hedge fund and absolute return strategies the board approved last spring. The board hasn’t decided on the amount of the allocation for the two potential searches, although they won’t take the entire 5%, Mr. Silber said.