Seattle City Employees' Retirement System terminated Pacific Investment Management Co. from a $65 million global inflation-linked fixed-income portfolio, said Jason Malinowski, chief investment officer, in an e-mail.
The $2.4 billion pension fund has terminated PIMCO “because our recently adopted strategic asset allocation no longer has a target allocation to inflation-linked bonds,” Mr. Malinowski said.
PIMCO still runs a $134 million active domestic core fixed-income portfolio for the pension fund.
The new target allocation is 48% public equities, 18% broad fixed income, 12% real estate, 9% private equity, 5% each credit fixed income and diversifying strategies, and 3% infrastructure.
The pension fund issued an RFP for infrastructure in May, and also discussed an interim plan for the new credit fixed-income target.
The plan “involves investing in a set of mutual funds and ETFs to gain exposure to the asset class before conducting manager searches for a more permanent allocation. We are not anticipating issuing an RFP,” Mr. Malinowski said.
The previous targets were 27% international equity, 25% domestic equity, 20% domestic fixed income, 12% real estate, 6% each covered calls and private equity, and 4% real return.
As of March 31, the pension fund's actual allocation was 32.9% domestic equity, 25.7% international equity, 21.4% domestic fixed income, 10.7% real estate, 5.2% absolute return, 1.9% cash, 1.8% private equity and the rest in overlay.
Investment consultant NEPC assisted.