Arkansas Teacher Retirement System, Little Rock, hired four equity and fixed-income managers to run $1.3 billion total and committed up to another $150 million total to four alternative investment funds, confirmed George Hopkins, executive director.
The $14.1 billion pension fund hired Grantham, Mayo, Van Otterloo and Harris Associates to run $350 million each in active global equity. Funding comes from the earlier termination of Wellington Management, which had managed $400 million in active opportunistic global equity, and the withdrawal by Bedlam Asset Management as manager of a $259 million active global equity strategy. Bedlam announced in November it was winding down its business.
The pension fund also hired Wellington Management and Reams Asset Management to run $300 million each in fixed income: Wellington, in its global total-return strategy; and Reams, for core-plus bonds. Funding comes from the previous termination of Western Asset Management, which had managed about $750 million in core and unconstrained bonds. A $330 million BlackRock U.S. core bond strategy also received an additional $50 million from the WAMCO terminations. The remaining $100 million went to a State Street Global Advisors core bond indexed strategy, increasing the total to about $235 million.
Separately, the pension fund committed up to $50 million each to two infrastructure funds — First Reserve Energy Infrastructure II and Antin Infrastructure Partners II.
It also committed up to $25 million each to Castlelake III, a distressed debt fund, and Sycamore Partners II, a small- to middle-market private equity fund. The pension fund had committed $35 million each to previous Castlelake (which until August 2013 had been TPG Credit Management) and Sycamore funds.
Also, for the year ended Dec. 31, the pension fund returned 19.8%, surpassing its benchmark of 18.2%. U.S. equity led the way with a 34.6% return, followed by global equity, 26%; agriculture, 19.6%; private equity, 16.8%; opportunistic/alternatives, 12.9%; real estate, 9.4%; timber, 6.4%; and fixed income, 0.7%.