Manchester (N.H.) Employees’ Contributory Retirement System is creating new targets to absolute-return fixed income and liquid alternatives, increasing its exposure to international equities and dropping emerging markets debt as a result of an asset allocation review, said Gerard Fleury, executive director, in an e-mail.
The $198 million pension fund is creating targets to absolute-return fixed income and liquid alternatives of 5% each. It is also increasing the targets to international equities to 15% from 9%, core fixed income to 9% from 8% and private equity to 6% from 5%. Targets being decreased are domestic large-cap equities to 16% from 20%, domestic small/midcap equities to 6% from 7%, diversified fixed income to 6% from 8% and hedge funds to 5% from 10%.
The emerging markets debt (local currency) 6% target is being eliminated, and the real assets portion of the 10% real estate/real assets target is being eliminated as well. The pension fund’s $5 million investment in a real assets fund managed by Wellington Management is being liquidated as a result of the change. Mr. Fleury said manager performance was not a reason for termination, but overall sector performance. Real estate will remain at the 10% target.
Emerging markets debt manager Standish Mellon Asset Management had already been terminated in December when the board had decided to exit the asset class.
Remaining unchanged are targets to global asset allocation (10%), emerging markets equities (5%) and cash (2%).
Mr. Fleury said the pension fund’s investment consultant, NEPC, will present a timeline for implementation of changes at the pension fund’s May 17 board meeting. The pension fund does not issue RFPs, and any manager searches would be invitation only, Mr. Fleury said.