University of Kentucky's investment committee approved a new target allocation for its $1.6 billion endowment, including an increase in the target to global public equities to 33% from 26%.
The Lexington-based university's investment committee approved the targets as part of changes to the endowment's investment policy at its remote meeting Monday. The moves followed an asset allocation study.
Todd Shupp, chief investment officer, said in the meeting the new targets are intended to be modest and changes to the endowment's allocation will be incremental in nature.
While the global public equities was raised, the 6% target to hedged long/short equities was eliminated. Private credit and public credit targets were reduced to 4% and 2%, respectively, from a respective 5% and 4%, and public real assets were reduced to 3% from 6%.
Also, the target to diversifying strategies was increased to 20% from 15%. The new investment policy moves hedged long/short equity and fixed income funds, previously categorized under global equities and public credit, to the diversifying strategies category.
Targets that remain unchanged are 20% private equity, 11% private real assets and 7% high-quality/rate sensitive fixed income.
As of Oct. 31, the endowment's actual allocation was 19.2% private equity, 15.5% domestic equities, 15.4% international equities, 14.1% diversifying strategies, 10.3% private real assets, 6.3% high-quality/rate sensitive fixed income, 5.7% hedged equity, 5.2% public credit, 5.1% public real assets, 3% private credit and 0.2% cash.
Investment consultant Fund Evaluation Group assisted with the asset allocation study.