Maryland State Retirement & Pension System, Baltimore, is increasing its absolute-return target to 10% from 7%, focusing on strategies with lower correlation and beta exposure to equities.
Chief Investment Officer A. Melissa Moye said in an interview that the staff will identify managers to reach the higher target over the coming year.
At an investment advisory committee meeting of the board of trustees Friday, investment staff also reported $665 million in unfunded commitments in credit/debt strategies. Ms. Moye said those commitments were in the pipeline, “primarily in the public sector.” Public investments represent roughly half of the credit/debt strategies allocation.
Maryland is also well under its $2 billion target allocation to core real estate, with about $550 million committed to date, and more in the works. “Those are going to be gradual, starting this year,” Ms. Moye said.
The $41.1 billion pension fund returned 10.6% for the fiscal year ended June 30, net of fees, vs. 8.5% for its benchmark.