Anne Arundel County Retirement and Pension System, Annapolis, Md., increased its domestic equity target allocations and eliminated its targets to absolute return fixed income and risk parity, confirmed Jim Beauchamp, board member and county budget officer.
The $1.9 billion pension fund's board approved increases to the targets to domestic large-cap equities and domestic small/midcap equities to 24% and 7%, respectively, from their previous respective targets of 17% and 4%.
Also, the board approved increasing the target to private markets to 12% from 11%, and bank loans and high yield to 5% each from 4% each, and decreasing the target to core fixed income to 10% from 11%. Completely eliminated are the 9% target to risk parity and the 3% target to absolute return fixed income.
Targets that remain unchanged are: 12% international large-cap equities; 7% emerging markets equities; 6% real estate; 5% each, emerging markets debt (blended) and international small-cap equities; and 2% cash.
According to Aug. 18 board meeting minutes, the changes were recommended by investment consultant NEPC after conducting an asset allocation study. With the new allocation, the expected 30-year rate of return would increase to 7.09% from 6.82%, according to the minutes.
The minutes also showed that due to the changes, the pension fund would terminate portfolios managed by BlackRock and Bridgewater Associates; the nature of the portfolios could not be immediately learned. Mr. Beauchamp did not provide further information.
