Springfield (Mo.) Police Officers' & Firefighters' Retirement System will search for managers to run new targets to multiasset-class strategies, credit and event-driven hedge funds, and infrastructure following an asset allocation study, said Janell Manley, administrative director, in an email.
The $362 million pension fund created targets of 5% each to credit and event-driven hedge funds and multiasset-class strategies, and 3.5% to infrastructure. Interested managers can contact investment consultant Segal Marco Advisors, which will conduct shortlist searches.
The pension fund also eliminated targets of 5% each to commodities and inflation-linked fixed income. As a result, the pension fund terminated State Street Global Advisors, which managed both the commodities and inflation-linked fixed-income portfolios of $12 million and $16 million, respectively. "Although State Street did a good job, we felt these monies would be better utilized in another area," Ms. Manley said.
As a result of the addition of the 5% target to credit and event-driven hedge funds, the pension fund reduced its hedge fund-of-funds target to 5% from 10%. As of March 31, Blackstone Alternative Asset Management and EnTrustPermal ran hedge fund-of-funds portfolios of $16 million and $14 million, respectively. The managers' portfolios will be reduced to about $8 million and $7 million, respectively.
The pension fund also decreased international developed markets fixed income to 2.5% from 9%. As of March 31, Brandywine Global Investment Management was the sole manager within that asset class with a $28 million portfolio and its portfolio is being appropriately reduced.
The pension fund also increased its target to domestic large-cap equities to 17% from 12%; emerging markets equity to 11% from 10%; domestic small-cap equities to 4.5% from 4%; and real estate to 4% from 2.5%. The portfolios of existing managers will be appropriately increased, Ms. Manley said.
Targets that remain unchanged are: 11% international developed markets equities; 10% each, core fixed income and long-term fixed income; 5% emerging markets debt; 4% international small-cap equities; and 2.5% global real estate investment trusts.
As of March 31, the actual allocation to broad asset classes was: 22.9% domestic fixed income, 21.2% domestic equity, 16.1% international equity, 12.9% international fixed income, 11.6% alternative investments, 8.1% emerging markets equity, 5.9% real estate and 1.3% cash and cash equivalents.