Hawaii Employees’ Retirement System, Honolulu, is in the process of transitioning its fixed-income managers to two of its four new risk-based categories, said Vijoy Chattergy, chief investment officer.
Existing international fixed-income manager Oechsle International Advisors; domestic managers Pacific Income Advisers and First Hawaiian Bank; and core-plus manager Pacific Investment Management Co. will fall under the new principal protection category, which has an overall target allocation of 12%.
Core-plus managers Bradford & Marzec and Western Asset Management Co. will focus on credit under the broad growth category. PIMCO also has a credit mandate that will fall under this category. The target allocation for broad growth will be 76% of the overall portfolio and will include public and private equity managers and covered calls.
No managers have been moved at this point as the adjusted mandates and fees are still being finalized, Mr. Chattergy said. Managers could see their allocations increase or decrease slightly from current levels as a result of the overall rebalancing.
The new risk-based framework, which includes a 7% real estate target and 5% real-return target, was approved by the pension fund board in August. Policy guidelines went into effect Oct. 1.
Pension Consulting Alliance, the $13.9 billion pension fund’s investment consultant, will conduct an asset allocation study of the new risk framework. Mr. Chattergy said. New strategies and allocations will be considered as part of the study, which could be launched in the next six months.
Separately, the pension fund is searching for an executive search firm to conduct a search for a permanent executive director.
The job posting could become available on the state’s procurement website in the next week or so.
Kanoe Margol, deputy executive director, was appointed interim executive director in December. She replaced Wesley Machida, who become the state’s director of finance and head of the Department of Budget and Finance.
