Ohio State Teachers Retirement System, Columbus, is hiking its exposure to private credit, liquid alternatives and fixed income and lowering exposure to public equities and real estate following the completion of an asset-liability study.
The $97.7 billion pension fund’s board approved the changes at its March 19 meeting, a livestream of the meeting showed.
The board approved increasing targets to core-plus fixed income to 21.5% from 17%, private credit to 10% from 7%, liquid alternatives to 7% from 3%, intermediate Treasuries to 5.5% from 5%, as well as creating a new target of 3% to long Treasury bonds.
Targets being decreased are domestic equities to 19.3% from 26%, international developed markets equities to 12.6% from 17.6%, real estate to 8% from 10% and emerging markets equities to 3.2% from 4.4%.
Targets that remain unchanged are 9% private equity and 1% cash equivalents. The total exceeds 100% due to rounding error.
The changes increase the pension fund’s total exposure to private markets to 25.8% of its portfolio, up from 24.5%, according to a presentation from investment consultant Meketa Investment Group, which conducted the asset-liability study. The percentage combines the targets to private equity and private credit with the private portion of the real estate asset class.
As of Feb. 28, the pension fund’s actual allocation was 26% domestic equities, 17.8% international developed markets equities, 17.2% core plus fixed income, 9.7% private equity, 9.5% private credit, 8.2% real estate, 5.3% intermediate Treasuries, 4% emerging markets equities, 1.5% cash equivalents and 0.8% liquid alternatives.
