New Orleans Sewerage & Water Board is adding new targets to global infrastructure and private equity funds of funds and eliminating its target to hedge funds in its $256 million pension fund following an asset allocation study.
The board's pension committee approved a new 10% target allocation to private equity funds of funds and 7% target to global infrastructure at its meeting Wednesday, according to a video of the meeting.
The committee also approved the elimination of its 8% target to hedge funds because of "structural headwinds that have resulted in disappointing annualized returns and high fees," according to a presentation from investment consultant Marquette Associates included with meeting materials.
Overall changes were recommended to bring the pension fund's expected 10-year annualized return up to 7.01% from 5.91%.
The pension committee also approved increasing the targets to domestic equities to 34% from 27%, international equities to 21% from 20% and reducing the targets to fixed income to 25% from 36% and real assets to 3% from 9%.
As of Sept. 30, the actual allocation was 53.6% equities, 30.4% fixed income, 8.8% real estate, 7.1% alternatives and 0.1% cash composite.
Marquette Associates conducted the asset allocation study.
