Philadelphia Board of Pensions and Retirement approved changes to the target allocation of the $7.5 billion Philadelphia Public Employees Retirement System, including increases in fixed income and a newly created target to private debt.
The board approved the changes following an annual asset allocation review at its Oct. 26 meeting, said Christopher DiFusco, chief investment officer.
Among the changes was an increase in the target for broad fixed income to 21% from 13% and the creation of new targets of 4% for 91-day T-bills, 3% for opportunistic credit and 2% to private debt, as well as the elimination of the targets of 1% each for global aggregate fixed income and high yield.
The board also approved reducing the overall target for domestic equities to 24% from 28%. The new 24% target is for one category of domestic all-cap equities, while the old target was split into 20% domestic large-cap core equities and 4% each domestic midcap core equities and domestic small-cap core equities.
The overall target for international equities was also reduced to 12% from 13%. The new target is for one category of broad international equities. Previously, the allocation was split into 10% for international developed markets large-cap equities and 3% for international developed markets small-cap equities.
Also reduced were targets to global low-volatility equity and private equity to 8% each from 10% each, core real estate to 7% from 10%, and emerging markets equities to 2% from 3%.
Targets that remain the same are 5% global infrastructure, 2% emerging markets debt, 1% each opportunistic real estate and public real estate investment trust.
DiFusco said there are no new manager hires and terminations planned as a result of the changes.
As of June 30, the pension fund's actual allocation was 28.8% domestic equities, 23% international equities, 13.4% private assets, 12.2% real assets, 10.7% investment-grade fixed income, 4.9% cash, 3.5% opportunistic fixed income, 3% emerging markets equities and the rest in absolute return.
Investment consultant Marquette Associates assisted with the asset allocation review.
