Tulare County Employees' Retirement Association, Visalia, Calif., approved a new asset allocation that creates targets to infrastructure and opportunistic real estate, and more than doubles its target to private equity.
The $1.9 billion pension fund's board approved the new asset allocation at its Aug. 11 meeting following the completion of an asset-liability study conducted by investment consultant Verus Advisory, confirmed Leanne Malison, retirement administrator.
The new allocation includes the creation of new targets of 4% each to infrastructure and opportunistic real estate and more than doubles the pension fund's target to private equity to 12% from 5%.
The new allocation also increases targets to domestic equities to 20% from 19% and international developed markets equities to 13% from 12%.
The new allocation also decreases targets to fixed income to 20% from 27%, value-added real estate to 4% from 5%, core real estate to 3% from 10%, and real estate debt to 3% from 5%. Targets that remain unchanged are 6% domestic small-cap equities, 5% private credit and 3% each emerging markets equity and global equity.
The changes were recommended after the board expressed support at its May 26 meeting for Verus to explore adopting a higher-risk portfolio, according to Aug. 11 meeting materials.
Ms. Malison said in a phone interview that TCERA began working on an implementation plan at its investment committee meeting Wednesday and will likely not complete the plan before year-end, although some actions might take place before then.
As of June 30, the actual allocation was 28.4% domestic equities, 19.9% domestic fixed income, 16.7% international equities, 9.7% real estate, 5.6% private equity, 4.5% international fixed income, 4.4% each global fixed income and private credit, 3.9% global equity, 1.3% cash and equivalents, and 1.2% other.