Oklahoma Police Pension & Retirement System, Oklahoma City, plans to issue an RFP in the fourth quarter or first quarter of 2015 for real assets managers, said Steven Snyder, executive director and chief investment officer.
As of July 31, the $2.2 billion pension fund had a 9.77% allocation to total real assets and a 15% target.
The pension fund also hired Northern Trust Asset Management to run between $350 million and $400 million in passive large-cap core equities and domestic small-cap growth equities. The Northern Trust small-cap growth allocation will be used as a placeholder to fund the real assets allocation.
An RFP for a passive large-cap core equity manager was issued in July. Northern Trust replaced Mellon Capital Management, which rebid. Following the hiring of Northern Trust, the board also decided to transfer Mellon Capital's passive small-cap growth equity allocation to Northern Trust.
Lower fees offered by Northern Trust was among the reasons for the switch, Mr. Snyder said.
The pension fund has a 15% target allocation to domestic large-cap equity.
Separately, the pension fund hired Cavanaugh Macdonald Consulting to audit the work of current actuary Buck Consultants, Mr. Snyder said.
An RFP was issued in June.
Also, for the fiscal year ended June 30, the pension fund returned 14.99% net of fees, below its policy benchmark of 17.3%. The top performer was the equity composite, which returned 19.08%, followed by the real assets composite at 10.88% and fixed-income composite at 9.48%.
As of June 30, the pension fund had an actual allocation of 65.6% equity, 27% fixed income, 6.3% real assets and the rest in cash/equivalents.
For the three, five and 10 years ended June 30, the pension returned an annualized net 9.08%, 11.3% and 7%, respectively.