Jacksonville (Fla.) Police & Fire Pension Fund approved a new target allocation that includes the creation of targets to private credit and non-core real estate, said Timothy H. Johnson, executive director.
The $2.3 billion pension fund's board approved the new allocation at its Nov. 20 meeting following an asset allocation study by RVK, the pension fund's investment consultant.
The new allocation includes new targets of 8% and 5%, respectively, to private credit and non-core real estate and the elimination of targets of 10% and 3%, respectively, to private equity and master limited partnerships.
The pension fund had yet to make any private equity commitments since the creation of the target in 2019 and its actual allocation to the asset class is zero.
Targets that remain unchanged are 31% domestic large/midcap equities, 16% core-plus fixed income, 14% international large/midcap developed markets equities, 10% core real estate, 6% each domestic small-cap equities and emerging markets equities, and 4% domestic aggregate fixed income.
According to a presentation from RVK, the changes increase the long-term expected return of the fund to 7.06% from 6.92%.
Mr. Johnson said it will take a couple of years to reach the new targets, and the first step is a pacing plan to be developed by RVK.
As of June 30, the actual allocation was 34% domestic large/midcap equities, 18% core-plus fixed income, 16% international large/midcap developed markets equities, 11% core real estate, 7% each domestic small-cap equities and emerging markets equities, 5% domestic aggregate fixed income and 2% MLPs.