Stanislaus County Employees' Retirement Association, Modesto, Calif., created new target allocations to public credit and U.S. Treasury inflation-protected securities following the completion of an asset-liability study.
The $2.8 billion pension fund's board approved the changes at its Dec. 12 meeting, recently released meeting minutes showed.
Within the pension fund's growth subportfolio, which has a total target of 73%, the board approved creating a new 4% target to public credit and the reduction of the targets to international equities to 18% from 20% and domestic large-cap equities to 14% from 16%. Targets that remain unchanged are 8% private credit, 7.5% infrastructure, 6.5% core real estate, 6% value-added real estate, 5% private equity and 4% domestic smidcap equities.
Within the pension fund's risk-diversifying subportfolio, which has a total target of 19%, the board approved creating the new target of 4% to TIPS, increasing the target to liquid absolute return to 5% from 3% and reducing the target to risk parity to 4% from 10%. The target of 6% to U.S. Treasuries remains the same.
Within the pension fund's liquidity subportfolio, which has a total target of 8%, the targets of 7% and 1%, respectively, to cash flow-matched bonds and cash, remain the same.
In education materials for StanCERA's Jan. 23 board meeting, investment consultant NEPC said it will be recommending a short-term TIPS index fund in the future. Manager recommendations are set to be made sometime in the first half of 2024.
As of Dec. 31, StanCERA's actual allocation was 19.7% international equities, 17.3% domestic large-cap equities, 8.5% private credit, 8.4% risk parity, 8% intermediate fixed income, 7.2% core real estate, 7.1% infrastructure, 5.6% private equity, 5.2% Treasuries, 4.4% non-core real estate, 4.3% domestic small-cap equities, 2.6% absolute return and 1.7% cash.
