University of Missouri System, Columbia, rehired Verus Advisory as general investment consultant for its $3.7 billion defined benefit plan and $1.7 billion endowment pool, said Thomas F. Richards, treasurer and chief investment officer, in an email.
The university issued an RFP in March because Verus' contract will expire in October. Verus will also continue to advise on the university's $2.3 billion general pool portfolio, which includes the system's cash and operating funds. Mr. Richards would not say whether there were other finalists.
The defined benefit plan's target allocation is 32% public equities; 17% inflation-linked fixed income; 15% sovereign bonds; 10% each private equity and risk balanced portfolio; 8% real estate/infrastructure; 5% commodities; and 3% private debt.
As of June 30, the DB plan's actual allocation was 35% public equities; 11% each inflation-linked bonds and risk-balanced portfolio; 10% each private equity and U.S. Treasuries; 7% real estate; 6% commodities; 5% each global fixed income and private debt; and the rest in cash.
The endowment pool's targets are 35% public equities, 15% inflation-linked bonds, 14% U.S. Treasuries, 10% each private equity and risk-balanced portfolio, 8% real estate, 5% commodities and 3% private debt.
As of June 30, the actual allocation of the endowment pool was 38% public equities, 11% each private equity and risk-balanced portfolio, 10% U.S. Treasuries, 9% inflation-linked bonds, 8% real estate, 6% commodities, 4% global fixed income and 3% private debt.
Separately, the endowment pool returned a net 9.4% in the fiscal year ended June 30. The return exceeds the pool's 8.7% benchmark for the time period. For the three, five and 10 years ended June 30, the endowment pool returned an annualized net 7.6%, 8.2% and 6.3%, respectively, above their respective benchmarks of 6.5%, 7.8% and 6%. The endowment pool returned a net 13.7% for the fiscal year ended June 30, 2017.
By asset class, the best performer for the fiscal year ended June 30 was real estate, which returned a net 14.7% (more than doubling its 7.1% benchmark); followed by private equity, which returned a net 13.7% (below its 16.1% benchmark); and public equities, which returned a net 12.3% (above its 11.2% benchmark). Other asset class net returns for the fiscal year ended June 30 were private debt, returning 9.2% (above its 4.4% benchmark); commodities, 7.7% (7.2%); inflation-linked bonds, 6% (3.1%); risk-balanced strategies, 3.8% (7.4%); global fixed income, 2.7% (1.4%); and U.S. Treasuries, -1.6% (-1.4%).