New Mexico Public Employees Retirement Association, Santa Fe, plans to launch an RFP for a manager to run a new multistrategy credit portfolio of up to $400 million, said Jonathan Grabel, chief investment officer for the $13.4 billion pension fund.
The portfolio would be part of the pension fund's 5% opportunistic credit allocation. Pension fund officials are welcoming proposals for traditional or hedge fund structures. Funding would come from cash. Fund officials plan to post the RFP on March 15, with responses due April 15 and a selection expected as early as late spring or early summer. The RFP will be available on the pension fund's website.
Separately, the board is expected to select a new asset allocation as early as its April 28 meeting. Pension officials are in the midst of conducting an asset allocation study. The board is planning to discuss various allocation scenarios at its March 31 meeting. The pension fund's general investment consultant, Wilshire Associates, is assisting.
The pension fund's current strategic allocation targets are 26.1% core and global fixed income, 24.8% international equity, 21.1% domestic equity, 7% private equity, 7% real assets, 5% core-plus fixed income, 5% real estate and 4% absolute return.
Also, the board at its Feb. 25 meeting committed $75 million to Brookfield Infrastructure Fund III, managed by Brookfield Asset Management. New Mexico PERA is already an investor in Brookfield Infrastructure Fund II.
The board also decided to replace Fidelity Diversified International Fund, an active international equity strategy managed by Fidelity Investments, with the passively managed Vanguard Total International Stock index fund in its $500 million 457 plan's custom lifecycle funds. The plan's custom lifecycle portfolios are crafted from the plan's existing investment options, Mr. Grabel said. The Fidelity fund will remain a separate investment option in the plan.
The board also revised the asset allocation of the lifecycle funds to, in part, lower equity exposure of portfolios that are closer to retirement date. The revision also replaced real assets, including real estate investment trusts, with Treasury inflation-protected securities as an inflation hedge in portfolios that are closer to their retirement dates, but retained exposure to real assets as an inflation hedge for portfolios with longer investment horizons.
