Orange County Employees Retirement System, Santa Ana, Calif., is moving its roughly $120 million active small-cap value equities portfolio to passive management, said Robert Kinsler, spokesman for the $12 billion pension fund, in an e-mail.
Artisan Partners currently manages an approximate $120 million active small-cap value portfolio.. Staff is expected to propose a plan for implementing the change as early as the Aug. 27 investment committee meeting. OCERS will retain Eagle Asset Management as its active small-cap growth equities manager with a 1% allocation, or roughly $120 million.
Separately, the investment committee at its July 30 meeting approved a directional strategy for the real assets portfolio proposed by general investment consultant NEPC. OCERS is retaining its 10% real assets allocation, but within real assets, the allocation to illiquid strategies is increasing by one percentage point to 7%. This increase will be accomplished by raising the target to illiquid energy investments to 3.5% from 3% and illiquid metals and mining investments to 1% from 0.5%. Target allocations to other illiquid sectors in real assets will remain the same: infrastructure at zero, timber at 1% and agriculture at 1.5%. Liquid real assets is being reduced by one percentage point to 3%, with commodities down to zero from 1%. Multiasset strategies will remain at 3%.
The new targets are expected to result in commitments of $150 million to one or two energy funds and $50 million to a metals and mining fund this year, according to the pacing plan adopted by the committee. In 2015, pension fund officials are expected to commit $200 million to one or two energy funds and in 2016, officials are expected to commit $150 million to one or two energy funds and $50 million to an agriculture fund.