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Pension Funds

Miami General Employees cuts out real estate after asset-liability study

Miami General Employees' & Sanitation Employees' Retirement Trust, Coconut Grove, Fla., eliminated its real estate asset class and increased targets to core fixed income and domestic large-cap equities as the result of an asset-liability study, said Edgard Hernandez, pension administrator.

The $655 million pension fund eliminated the 5% real estate target and increased targets to core fixed income to 23% from 20% and domestic large-cap core, growth and value equities to 16% each from 14% each. The pension fund also dropped its domestic small-cap equity target to 9% from 10% and international equities to 8% from 11%.

Targets remaining the same are 6% intermediate fixed income, 3% cash, 2% emerging markets equities and 1% high-yield fixed income.

Mr. Hernandez said no manager searches are expected, and the pension fund plans to move toward the new allocation over the course of the next one to two years. So far, the pension fund has terminated EII Capital Management from its $27 million real estate investment trust portfolio and has added about $13.5 million each to core fixed-income managers Richmond Capital Management and Seix Investment Advisors, making their current portfolios $87 million and $58 million, respectively. Also, the pension fund terminated State Street Global Advisors from its $17 million passive domestic large-cap value equity portfolio, adding it to Barings' active international equity portfolio, to give Barings a total of about $48 million.

As of Sept. 30, the actual allocation was 55.2% domestic large-cap equities, 23.5% fixed income, 7.8% domestic small-cap equities, 5.9% international equities, 4% real estate and the rest in cash.

Investment consultant Southeastern Advisory Services assisted.