Kern County Employees' Retirement Association's investment committee recommended terminating four equity managers as it implements asset allocation changes approved earlier this year, said Peter Tirp, chief investment officer.
The $3.6 billion Bakersfield, Calif.-based pension fund's board will vote on the recommendations at its Dec. 14 meeting, the results of the pension fund reducing targets to domestic equity to 19% from 23% and international equity to 18% from 22%.
The managers are J.P. Morgan Asset Management, which runs about $185 million in active international equities; T. Rowe Price Group, $145 million in active domestic large-cap equities; PanAgora Asset Management, $104 million in active domestic large-cap equities; and Fidelity Institutional Asset Management, $90 million in active international large-cap equities. Fidelity still would run an international small-cap equity strategy for the pension fund.
Mr. Tirp said the pension fund is conducting an invitation-only search for managers to run a total of up to $240 million in global equities. After those managers are hired in the first quarter, Mr. Tirp said the pension fund will concentrate on private credit, for which a 5% target allocation was created, and then the pension fund will move on to real estate, whose target was increased to 10% from 5%. The portfolios of the terminated managers will fund these allocations.
The target for commodities also was decreased, to 4% from 6%, but no further information on that asset class was available. Fixed-income and hedge fund targets remain the same at 29% and 10%, respectively.
Mr. Tirp also noted the pension fund added $30 million to an existing high-yield portfolio managed by Western Asset Management Co., giving it $185 million. Funding comes from rebalancing.
Investment consultant Verus Advisory is assisting.
