INVESTING/PORTFOLIO STRATEGIES

Kentucky Teachers assigns additional $25 million to IFM Investors

Pension fund also reports fiscal year return of -1%, below its benchmark

Kentucky Teachers’ Retirement System, Frankfort, committed an additional $25 million to IFM Global Infrastructure Fund, managed by IFM Investors, said Gary Harbin, executive secretary.

The $16.8 billion pension fund previously committed $50 million to the fund in 2013 and $50 million in 2014, bringing total commitments to $125 million.

In other news, for the fiscal year ended June 30, the pension returned -1%, below its benchmark return of 1.5%.

Non-core real estate posted the highest return at 19.1%, followed by core real estate at 14.2%, triple-net lease real estate, 9.4%; fixed income, 6.9%; private equity, 5%; timberland, 2%; and cash, 0.3%. On the flip side, domestic equity and international equity returned -1.8% and -10.9%, respectively, with most active managers underperforming their benchmarks, Mr. Harbin said.

Longer term, for the three, five and 10 years ended June 30, the pension fund returned an annualized 7.1%, 7.5% and 6.3%, respectively, vs. its three- and five-year benchmarks of 7.2% and 7.5%, respectively. A 10-year benchmark return was unavailable.

Mr. Harbin said over the long term all of KTRS’ active managers have outperformed their indexes.

As of June 30, the pension fund had an asset allocation of 42.9% domestic equity; 19.2% international equity; 17.1% fixed income; 7.9% additional categories, which includes areas such as alternative credit and high-yield bonds; 5.6% each alternatives and real estate; and 1.7% cash.