San Jose (Calif.) Police & Fire Department Retirement Plan is shifting its fixed-income allocation to investment-grade and long-term government strategies from short-term investment-grade strategies, following an asset allocation analysis.
The $3.6 billion pension fund's board at its March 18 meeting approved increasing an investment-grade bond target to 14% from 3%, creating a new long-term government bond target of 3% and eliminating the short-term investment-grade bond target of 14%, recently released meeting minutes show.
The pension fund also increased its target to domestic equities to 19% from 14%, and reduced emerging markets equities to 12% from 13% and international developed markets equities to 8% from 12%.
Also, the pension fund created a new 2% target to high-yield fixed income, increased targets to private real assets and private real estate to 4% each from 3% each, reduced the absolute-return target to 3% from 5% and eliminated a 2% target to commodities.
Targets that remain unchanged are 8% buyouts, 5% each cash equivalents and core real estate, 4% each private debt and venture capital, 3% emerging markets debt, and 2% Treasury inflation-protected securities.
How the new targets will be implemented could not be immediately learned.
As of Dec. 31, the actual allocation was 39.3% public equities; 21.5% private markets; 13.8% short-term investment-grade bonds; 6.5% absolute return; 4.4% immunized cash glows; 3.8% core real estate; 3% emerging markets debt; 2.8% sovereign bonds ex-U.S.; 2% each commodities and TIPS; 0.6% cash and the rest in overlay.
Prabhu Palani, chief investment officer, and Ron Kumar, investment operations supervisor, could not be immediately reached for further information.
