Pension fund also cuts equities, multiasset and real assets targets
Louisiana Municipal Police Employees Retirement System, Baton Rouge, increased its target to fixed income and lowered targets to equities, multiasset strategies and real assets following an asset allocation review, said Taylor Camp, chief financial officer.
Within fixed income, the $1.9 billion pension fund increased targets to core fixed income to 25% from 14% and emerging markets debt (local currency) to 5.5% from 4% and lowered targets to bank loans and high-yield bonds to 1.5% from 2% each.
In equities, the pension fund increased its target to domestic large-cap equities to 17% from 16% and lowered targets to international equities to 17% from 20%, emerging markets equities to 7.5% from 8% and domestic small/midcap equities to 7% from 8%.
In real assets, the pension fund kept core real estate at 8% and eliminated its 2% target to liquid real assets. As a result of the elimination of that latter target, the pension fund liquidated its $20 million investment with Energy Opportunities Capital Management.
In multiasset strategies, the pension fund kept its hedge fund target intact at 5% and eliminated the 6% target to global asset allocation. Currently, MPERS has no managers in the latter asset class. Private equity, in its own category, remains at its 5% target.
The current actual allocation is 21% core fixed income, 19.7% international equities, 16% domestic large-cap equities, 9.3% core real estate, 9% emerging markets equities, 7.7% domestic small/midcap equities, 4.3% hedge funds, 4% emerging markets debt (local currency), 2.7% private equity, 2.5% high-yield bonds, 2.4% bank loans, 1% liquid real assets and 0.4% cash.
Investment consultant NEPC assisted.