Jacksonville (Fla.) City Retirement System eliminated its target to master limited partnerships and increased its targets to international developed and emerging markets equities, following an asset allocation study.
The $2.5 billion pension fund's board approved the elimination of the 3% target to MLPs at its March 25 meeting, recently released meeting minutes show.
The board also approved increasing its targets to international developed markets equities to 16% from 14% and emerging markets equities to 7% from 6%, according to the minutes.
The pension fund's remaining target allocation is unchanged. Those targets are 30% domestic equities; 10% each U.S. aggregate fixed income, core plus fixed income and core real estate; 7% private equity; and 5% each non-core real estate and private credit.
Investment consultant RVK, which conducted the study, recommended eliminating the target to MLPs because "changes in recent years to corporate tax rates and regulatory policy has seen MLPs lose some of their structural advantage versus other asset classes," according to a presentation included with March 25 board meeting materials.
As of March 31, the pension fund had $42 million and $37 million, respectively, invested in MLP managed by Harvest Fund Advisors and Tortoise Capital Advisors, according to its most recent investment report.
As of that same date, the pension fund's actual allocation as 37.7% domestic equities, 24.4% international equities, 18% fixed income, 15.1% real estate, 4.6% diversifying assets and 0.2% cash equivalents.
Joey Greive, the city's director of finance and administration/chief financial officer and the board's vice chairman, could not be immediately reached for further information.