Fresno County (Calif.) Employees Retirement System has created a new 15% target to core fixed income following an asset allocation review, said Donald C. Kendig, retirement administrator.
The $5.2 billion pension fund also eliminated its 6% target to hedge funds and 3% target to Treasury inflation-protected securities, based on the recommendation of investment consultant Verus Advisory "to improve the portfolio's downside protection," according to March 4 board meeting materials.
Other changes include reducing the targets to liquid credit to 4% from 10% and global sovereign investments to 4% from 7%, and increasing the targets to real estate to 7% from 5% and infrastructure to 4% from 3%. Targets that remain unchanged are 49% public equities, 14% private assets and 3% emerging markets debt.
How the changes will be implemented has yet to be determined, Mr. Kendig said. For core fixed income, he said the board is leaning toward a hybrid option potentially using current investment-grade fixed-income manager Western Asset Management Co., and passive management options. WAMCO will make a presentation at a future board meeting. The timing of the meeting has yet to be determined.
As of Dec. 31, the actual allocation was 26% global fixed income, 22.1% international equities, 20.8% domestic equities, 6.1% each hedge funds and private credit, 5.2% private equity, 4.8% real estate, 3.8% cash and equivalents, 3.2% infrastructure and 1.9% other.
