Orange County Employees Retirement System, Santa Ana, Calif., invested or committed $400 million to four alternative investment vehicles, said Robert Kinsler, spokesman for the $15.1 billion pension fund, in an email.
The pension fund invested $150 million in AlphaSimplex Group's managed futures strategy as part of a trend-following portfolio within the pension fund's 10% target allocation to risk-mitigation strategies. Some 25% of the risk-mitigation strategy portfolio is expected to be invested in trend-following strategies. OCERS' general investment consultant Meketa Investment Group assisted. OCERS also committed $150 million to BH-DG Systematic Trading, a global systematic trend-following fund managed by a joint venture of Brevan Howard Asset Management and DG Partners.
The pension fund committed $75 million to Harvest Partners VIII, a North American middle-market buyout fund. The fund's target is $3.25 billion. OCERS' private equity consultant TorreyCove Capital Partners assisted.
OCERS committed $25 million to Genstar Capital Partners IX, a middle-market buyout fund. The fund has a $5 billion target. TorreyCove assisted.
All of the hires represent new relationships.
OCERS also terminated a $243.6 million allocation to PIMCO All Asset All Authority Fund, a real assets public markets strategy managed by Pacific Investment Management Co. Under its new asset allocation adopted in October, OCERS cut its real assets allocation to 17% from 22%, with a zero target to public market strategies. It has been using the capital to fund new risk-mitigation strategies. The risk-mitigation strategy was increased to 10% from 5%. The portfolio was redeemed March 1.
Separately, OCERS' investment committee on March 28 approved a pacing plan of $400 million to $450 million in private equity commitments in 2019 to maintain its 10% target allocation. The commitments are expected to be made across 10 to 13 investments of $20 million to $100 million each. In October, OCERS increased its private equity target allocation to 10% from 8%.
Also at its March 28 meeting, following a discussion of the recent merger of Pension Consulting Alliance and Meketa Investment Group, the OCERS investment committee determined that rather than assign the entire existing PCA contract to Meketa, it terminated the PCA contract and OCERS officials are renegotiating an additional scope of work with Meketa to accommodate the non-duplicative components of the services PCA had provided, Mr. Kinsler wrote.