New Mexico Public Employees Retirement Association, Santa Fe, plans to launch an RFP on Oct. 1 for an emerging markets debt manager to run a $150 million to $200 million portfolio, said Jonathan Grabel, chief investment officer of the $14.6 billion pension fund.
The pension fund is launching the RFP as part of a new strategic asset allocation that includes a new 5% allocation to fixed-income plus, which includes emerging markets debt. The RFP is part of a number of searches the plan expects to launch for strategies such as direct lending to fill out the new asset class.
Funding is expected to come from the pension fund's $4.5 billion allocation to domestic equities. The RFP will be posted on the pension fund's website.
Separately, the investment committee at its meeting Tuesday recommended that the board adopt changes to its domestic equity portfolio to reduce the portfolio's bias to small cap and growth and to make the portfolio market neutral, Mr. Grabel said.
The proposal would terminate INTECH Investment Management, which manages a $394 million enhanced index portfolio; J.P. Morgan Asset Management's $176 million small-cap growth fund; and State Street's Global Advisors' $160 million Russell 2500 index portfolio. None of these terminations would be due to performance, Mr. Grabel stressed.
State Street's $2.1 billion Russell 1000 index portfolio would be increased by $100 million under the recommendation. If these changes are implemented, they would reduce the cost of management of the entire domestic equity portfolio to 10.5 basis points from 19 basis points, Mr. Grabel said.
Separately, the investment committee is proposing the board commit up to $50 million to NGP Energy Capital Management's NGP Natural Resources Fund XI. PERA has invested in three earlier NGP funds. The proposals are expected to go before the board at its Sept. 25 meeting.