San Diego County Employees Retirement Association hired Wurts & Associates as its general investment consultant.
Wurts replaced incumbent Hewitt EnnisKnupp.
During the June 6 meeting, board member Dick Vortmann noted the two firms have very different philosophies on how they intend to educate the board about risk, according to a recording of the meeting. Board member Douglas Rose said Wurts is more focused on monitoring risk in the pension fund's portfolio.
Separately, the board eliminated the internal CIO position and added the duties to those of CEO Brian White. David Deutsch, the association's last CIO, was terminated in March 2009. The board also added the position of director of private markets, which will, in part, review the private markets acquisitions and sales, and ensure the board's private market investment objectives are implemented, according to a description of the position prepared for the board's meeting.
SDCERA officials expect to begin interviewing candidates for the director of private markets soon and to fill the position by the end of summer, said Dan Flores, senior communications officer of the $9.4 billion pension fund.
The board also adopted a three-year plan for fiscal year 2014 ending June 30, 2014, that includes adopting a “flexible asset allocation structure that is based on contribution of risk.” During the meeting, Mr. White explained guidelines could be developed that give the portfolio strategist the ability to make certain investments on its own without board or staff approval.
“We are considering a new asset allocation policy that diversifies our portfolio based on each asset's contributing risk to the overall portfolio,” Mr. Flores explained. Salient Partners will look at changing the pension fund's asset allocation policy from a percentage of dollars allocation to a risk-based allocation, he said.
“This change will help SDCERA continue its priority of minimizing its investment portfolio's risk and maximizing its rate of return,” he wrote.
