Fresno County (Calif.) Employees' Retirement Association is conducting a shortlist search for multisector credit managers to run a total of up to $620 million, said Douglas Kidd, investment officer, in an email.
The $6.2 billion pension fund's board will hold finalist presentations on March 2 for liquid multisector credit managers Loomis Sayles, PGIM Fixed Income and Pacific Investment Management to run up to $372 million, and on April 6 for less-liquid and less-constrained multisector credit managers GoldenTree Asset Management, HPS Investment Partners and KKR to run up to $248 million, Mr. Kidd said.
The shortlist searches are the result of investment consultant Verus Advisory's recommendation to restructure the pension fund's 10% target to credit because it will allow managers to "allocate dynamically across credit asset classes and capitalize on different market conditions," according to a presentation included with Feb. 2 board meeting materials. Verus Advisory is assisting.
The new structure consists of a 6% target to liquid multisector credit and 4% to semiliquid multisector credit.
Previously, the credit target consisted of 4% each bank loans and high yield and 2% emerging markets debt. Current managers for those asset classes are Eaton Vance, Loomis Sayles and PIMCO, respectively. As of Sept. 30, their portfolio sizes were a respective $201 million, $195 million and $190 million.
"We cannot yet say whether any managers will be terminated," Mr. Kidd said. "We appreciate the ongoing commitment to FCERA from each of our existing managers in fixed income."
