Kentucky Teachers’ Retirement System, Frankfort, committed $160 million total to three alternatives funds, said Gary Harbin, executive secretary.
The $17.9 billion pension fund committed $60 million each to Carlyle Realty Partners VII, an opportunistic real estate fund managed by Carlyle Group, and Landmark Real Estate Fund VII, an opportunistic fund managed by Landmark Partners that acquires existing real estate partnerships in the secondary market.
It also committed $40 million to Gavea Investment Fund V, a Brazilian private equity fund managed by Gavea Investimentos.
The pension fund made previous investments with Landmark and Carlyle; the Gavea commitment is a first.
Part of the commitment — $10 million to each fund, for $30 million total — came from the retirement system's $500 million Medical Insurance Plan, which funds retiree health benefits.
Separately, investment consultant Hewitt EnnisKnupp is conducting an asset/liability study, which is expected in May. As of Sept. 30, the asset allocation was 45.1% domestic equity, 19.7% domestic fixed income, 18.3% international equity, 5% “additional categories,” 4% each real estate and cash, 2.2% private equity, 1.1% timber and 0.6% international fixed income. “Additional categories” includes areas such as high-yield bonds and credit.
The pension fund returned 19.7% for the year ended Dec. 31, surpassing the policy benchmark of 17.9%.