Louisiana State Employees raises target allocations for 3 asset classes, lowers 5 others

Louisiana State Employees' Retirement System, Baton Rouge, increased its target allocations to private equity, global multisector fixed income and emerging markets debt as the result of an asset allocation review, said Robert W. Beale, chief investment officer, in an email.

The $11.6 billion pension fund raised the targets to private equity to 15% from 14%, global multisector fixed income to 7% from 4%, and emerging markets debt to 3% from 2%. Target allocations the pension fund is reducing are domestic large-cap equities, to 13% from 14%; absolute return to 7% from 8%; domestic small-cap equities to 6% from 7%; and core fixed income and domestic high-yield fixed income to 3% each from 4% each.

Targets that remain unchanged are 15% international large-cap equities; 12% emerging markets equities; 7% risk parity; 5% international small-cap equities; and 4% domestic midcap equities.

Mr. Beale said no managers will be terminated and the pension fund "will be patient with the implementation of changes. The global multisector asset class is a broad section of various fixed-income investments, both liquid and less liquid. That part of the plan will be invested over time as opportunities arise." LASERS does not conduct open RFP searches.

As of March 31, LASERS' actual allocation was 15.3% international small-cap equities, 14% each domestic large-cap equities and emerging markets equities, 12.9% private equity, 7% domestic small-cap equities, 6.8% risk parity, 6.5% absolute return, 5.7% international small-cap equities, 4% each domestic midcap equities and global multisector fixed income, 3.8% high yield fixed income, 3.5% core fixed income, 1.9% emerging markets debt and 0.6% cash equivalents.

Investment consultant NEPC assisted.