Lord Abbett's selection is expected to be ratified by KRS' board at its Sept. 13 meeting. A majority of board members serve on the investment committee; the vote at the June 27 investment committee was unanimous.
The allocation is part of the retirement system's long-term strategy to increase its core fixed-income exposure and reduce its equity exposure, Mr. Eager said.
Earlier this summer, the KRS board approved increasing its core fixed-income target to 20.5% from 10% for the Kentucky Employees Retirement System non-hazardous and State Police Retirement System pension plans and bumped up the target to 13.5% from 4% for the retirement system's five insurance plans and three other pension plans — KERS hazardous and County Employees Retirement System hazardous and non-hazardous.
At the same time, U.S. and international equity targets — previously 17.5% each for all five pension and five insurance plans — were reduced to 15.75% each for KERS non-hazardous and SPRS pension plans and bumped up to 18.75% each for the three other pension plans and five insurance plans.
Funding for Lord Abbett is expected to come from cash initially.
Investment consultant Wilshire Consulting assisted.
Separately, the investment committee recommended committing $200 million to IFM Infrastructure Debt Fund, managed by IFM Investors. It is a new relationship.
The pension and insurance plans have about $17.4 billion in assets combined.