St. Louis Public School Retirement System is creating new target allocations to global equity, emerging markets debt local currency and private debt as a result of an asset-liability study, according to recently released board meeting minutes.
The $914 million pension fund's investment consultant, NEPC, conducted the study and the board of trustees voted to accept the consultant's recommended asset allocation at its Oct. 21 meeting.
The new allocation created targets of 5% to global equity, 4% to emerging markets debt local currency and 1% to private debt.
Existing asset classes whose targets will increase are unhedged international equities, to 12% from 9%; emerging markets equities, 7% from 5%; and private equity, 4% from 3%.
Targets that will be decreased are domestic large-cap equities, to 13% from 21%; domestic small/midcap equities, 9% from 10%; domestic core fixed income, 7% from 10%; high-yield fixed income, 5% from 6%; and unhedged global fixed income, 3% from 6%.
Targets that will remain unchanged are 12% global asset allocation, 9% low volatility hedge funds, 5% core real assets, 3% liquid real assets and 1% corporate credit.
Separately, the pension fund's investment committee at its Nov. 21 meeting selected Axiom International Investors, Lee Munder Capital Group and OFI Global Asset Management as active emerging markets equity finalists. An invitation-only search was conducted to find a replacement for Batterymarch Financial Management, which ran $24 million in active emerging markets equities as of Oct. 31. The reason for the termination was not given.
The three finalists will make presentations at the investment committee's Jan. 16 meeting.
Executive director Andrew Clark did not return phone calls by press time.