Indiana Public Retirement System, Indianapolis, hired Galliard Capital Management to run a stable value option for the system's $5.12 billion annuity savings account.
Funds currently in the ASA's $2.8 billion guaranteed fund option, now managed by the system internally, will be moved to the Galliard fund effective Jan. 1. A bill signed by Indiana Gov. Mike Pence in April 2014 allowed the board to outsource ASA account investment management starting in 2017.
An RFP was issued April 22.
Separately, the board of the $30.7 billion system on Friday was asked to consider increasing the time between asset-liability studies to five years from three years. Scott Davis, chief investment officer, said increasing the time between studies will allow an asset allocation to be more fully implemented and investment results to be better assessed.
Also, the board's 4% private credit suballocation, now listed under its 20.8% ex-inflation-linked fixed income, would be combined with its 10% private equity target allocation to create a 14% private markets asset class under another board proposal. Mr. Davis said the characteristics of private credit investments correspond better with private equity.
The board will consider the changes at its Dec. 16 meeting.
Also, the pension fund returned a net 2.7% in the third quarter vs. the 2.33% return of its custom benchmark, according to an investment report. Through Sept. 30, the pension fund returned 8.35% year-to-date, compared with the benchmark's 8.08% return; 8.13% for 12 months vs. 7.94%; an annualized 6.33% over five years and an annualized 3.71% over 10 years, compared to its benchmark returns of 6.23% and 3.74%, respectively.
Global public equity had the highest return for the latest quarter, at 6.69%. Commodities had the lowest return, at -3.11%.
Among its other asset classes, inflation-linked fixed income returned 3.29%; risk parity, 2.4%; absolute return, 2.04%; ex-inflation-linked fixed income and private equity, 1.8% each; real estate, 1.67%; and cash and cash overlay, 0.63%
INPRS' actual asset allocation as of Sept. 30 was 23.3% global public equity, 20.8% ex-inflation-linked fixed income, 13.2% private equity, 11% risk parity, 8.8% absolute return, 7.8% inflation-linked fixed income; 7.7% commodities, 6.5% real estate, and the remainder in cash and cash overlay. All but private equity are within their target allocation ranges.
