Imperial County Employees' Retirement System, El Centro, Calif., is adding a new target allocation to private credit and eliminating its 5% target to commodities, said Michael Hermanson, administrator, in an e-mail.
The $689 million pension fund “has been disappointed with losses incurred from our commodity allocations and does not believe the inflation play is compelling at this time,” Mr. Hermanson said.
As a result, the pension fund will create the new 5% allocation to private credit and conduct an invitation-only search for managers. Mr. Hermanson said the pension fund will also conduct invitation-only searches for value-added real estate managers, reallocating funds within the real estate allocation to provide room for value-added managers, and for private equity managers to get that allocation up to its 5% target.
Gresham Investment Management and BlackRock are the pension fund's current commodity managers, managing $9 million and $4 million, respectively. Brian Beades, BlackRock spokesman, and KathNuveen Investmentseswoman at Nuveen Investments, majority owner of Gresham, could not be immediately reached seeking cNuveenkeswoman at Nuveen Investments, majority owner of Gresham, could not be immediately reached seeking comment.
The previous target allocation was 34% domestic equities; 23% domestic core fixed income; 16% international developed equities; 5% each, commodities, emerging markets equities, private equity, real estate and Treasury inflation-protected securities; and 2% high-yield fixed income.
As of June 30, the actual allocation was: 33.1% domestic equities, 27.9% domestic core fixed income, 16.5% international developed equities, 8.9% real estate, 6% emerging markets equities, 2.4% private equity, 2.2% Treasury inflation-protected securities, 2.1% commodities and the rest in cash. Investment consultant Verus is assisting.