Miami Firefighters' and Police Officers' Retirement Trust created a new target to core infrastructure and increased its target to private debt following an asset allocation review.
The $1.6 billion pension fund approved the changes at its Feb. 16 meeting, said Dania L. Orta, administrator, in an email.
The changes are the creation of a 3% target to core infrastructure and an increase in the private debt target to 3% from 2%, to be funded by the elimination of the 2% target to non-core infrastructure and the reduction of the U.S. Treasuries target to 5% from 7%.
Targets that will remain the same are 32% domestic equities, 22% international developed markets equities, 18% investment-grade fixed income, 9% real estate, 4% private equity, and 2% each bank loans and high yield bonds.
Investment consultant Meketa Investment Group, in a presentation included with Feb. 16 board meeting materials, recommended slight tweaks to the target allocation because all return expectations for nearly all assets have increased in the past year. Higher yields in fixed income, as well as lower valuations for public equities, have resulted in higher forward-looking return expectations.
As of Dec. 31, the actual allocation was 31.9% domestic equities, 22.5% international equities, 16.4% investment-grade fixed income, 10.4% real estate, 7.7% private equity, 3.6% U.S. Treasuries, 2.5% each bank loans and cash/cash alternatives, 1.8% high yield and 0.7% infrastructure.