Fresno County (Calif.) Employees' Retirement Association approved a new long-term asset allocation, according to an audiocast of the Dec. 4 board meeting.
Investment consultant Wurts & Associates presented the board with four alternative asset mixes, including a risk-based portfolio that would have decreased the total equity allocation to 24% from 53%.
The board approved an allocation of 14% domestic large-cap equity; 9% international large-cap equity; 8% liquid alternatives/hedge funds of funds; 7% each emerging markets equity and global sovereign bonds; 6% private equity/venture capital; 5% each U.S. credit, high-yield bonds, bank loans, local currency emerging markets debt, real estate and mezzanine debt; 4% TIPS; and 3% each domestic smidcap equity, international small-cap equity, commodities, infrastructure and distressed debt.
The current asset allocation is 24% domestic large-cap equity, 19% domestic core fixed income, 15% international large-cap equity, 7% private equity, 6% real estate, 5% each domestic smidcap equity and emerging markets equity; 4% each international small-cap equity, TIPS, commodities and liquid alternatives/hedge funds of funds; and 3% emerging markets debt.
The new asset allocation is expected to decrease risk and volatility for the $3.8 billion pension fund. Searches might be forthcoming in infrastructure and bank loans, both of which are new asset allocations for the pension fund.
The board also approved inviting Borealis Infrastructure and Industry Funds Management to discuss their infrastructure strategies at a future board meeting. Borealis is the infrastructure arm of the C$60.8 billion (US$57.3 billion) Ontario Municipal Employees Retirement System, Toronto.
Wurts & Associates also gave an educational presentation on bank loans, but a vote on a potential search was tabled to a future meeting.