Indiana Public Retirement System, Indianapolis, committed and invested $450 million total with six managers.
INPRS invested $250 million in three hedge funds — $100 million each in a long/short structured credit strategy with Tilden Park Capital Management and a fixed-income relative value fund with Black River Asset Management; and $50 million in Oceanwood Capital Management's Europe-focused event-driven strategy, David Cooper, chief investment officer, reported at the Friday board meeting.
In real estate, $75 million was committed to Blackstone Real Estate Partners VIII, an opportunistic real estate fund managed by Blackstone Group, and $50 million to Abacus Multi-Family Partners III, managed by Abacus Capital Group.
The system also committed $75 million to EnCap Energy Capital Fund X, a private equity fund managed by EnCap Investments that focuses on North American oil and gas companies.
Also, the board of the $30.2 billion system discussed two options for changing its target asset allocation at Friday's meeting, part of an asset-liability study being conducted by Verus Advisory, the system's investment consultant. The changes include increasing its risk-parity, long Treasury inflation-protected securities and fixed-income target allocations and cutting public equities and real estate.
Private equity and commodities would remain unchanged under both allocation options.
One target option would have 20% each in public equity and ex-inflation-linked fixed income; 15% in risk parity; 10% each in private equity, inflation-linked fixed income and absolute return; 8% in commodities and 7% in real estate.
In the second option, ex-inflation-linked fixed income would be at 22%, with 20% each in risk parity and public equity; 17.5% in inflation-linked fixed income; 10% private equity; 8% commodities; 7.5% absolute return; and 7% in real estate. The second option includes 12% leverage, said Jennifer Dunlap, INRPS spokeswoman.
INPRS' current target allocation is 22.5% public equity; 22% ex-inflation-linked fixed income; 10% each risk parity, private equity, inflation-linked fixed income and absolute return; 8% commodities and 7.5% real estate.
According to a forecast by Verus, the second options would have a 10-year annualized expected return of 6.48% vs. the first option's 6.27% expected return and the current 6.25% expected return rate. Also, the second option would have a “modest increase” in risk.
The board is expected to select one of the options at its June 26 meeting.
