KRS' board approved the investment on Dec. 17, with an initial commitment of $750 million with the potential to grow to $1 billion, Mr. Robben wrote in a Tuesday email.
Funding for the Loomis mandate will come from "existing cash and a partial liquidation of an intermediate credit index (collective trust fund) from Mellon," formerly known as BNY Investment Management, Mr. Robben wrote.
In 2017, KRS' investment committee approved the BNY collective trust fund as a "temporary placeholder" while staff worked with its investment consultant Wilshire Consulting "to develop this recommendation on the permanent structure of the core fixed-income allocation," November investment committee meeting minutes state.
Wilshire handled the manager search for KRS, Mr. Robben said.
As of June 30, KRS had $12.3 billion in assets across its five pension funds.
In the summer, the board approved increasing the 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, P&I Daily reported in July.
At the time, KRS also confirmed it was hiring Lord Abbett to run $750 million in short-duration core fixed income.