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Asset Owners

North Dakota to cut $800 million Wells Capital mandate in half

North Dakota State Investment Board, Bismarck, plans to reduce an $800 million fixed-income allocation with Wells Capital Management by 50%, and reallocate the assets across two of its existing bond managers, said David J. Hunter, executive director and chief investment officer of the $14.3 billion board.

Currently, Wells Capital, a unit of Wells Fargo Asset Management, manages about $800 million across two mandates in North Dakota's insurance pool and legacy fund, board documents show.

North Dakota's retirement and investment office seeks to make the move to reduce risk across the investment pools, as the Wells Capital Medium Quality Credit strategy has a high exposure to BBB-rated bonds, Mr. Hunter said in March, explaining that the investment board seeks to tilt toward A-rated bonds.

"They are all investment-grade (bonds). We are just going up a little in the credit grade spectrum. Wells has been doing a great job for us, but we are pretty long into this economic cycle," he added.

Mr. Hunter said in a follow-up call Wednesday that the board in March approved an allocation of about $250 million to PGIM, which already manages about $961 million in core and core-plus bond mandates for the investment board.

On Friday, the retirement and investment office will seek approval from the investment board to allocate $150 million to a Pacific Investment Management Co. core-plus constrained strategy, Mr. Hunter said.

PIMCO currently manages $550 million in fixed-income investments for the investment board, including $319 million in a core-plus constrained fixed-income mandate for its pension pool, board documents show.