East Bay Municipal Utility District Employees' Retirement System, Oakland, Calif., hired Brigade Capital Management to run a $95 million high-yield portfolio, and Aristotle Pacific Capital and Beach Point Capital Management to run $64 million each in bank loan portfolios.
The $2.5 billion pension fund’s board approved the hirings at its March 20 meeting, said Steven Goodman-Leibof, investment administrator.
The pension fund issued two RFPs in November as a result of changes to its asset allocation approved at its board’s meeting in May 2024.
The changes included increases to the targets to high-yield bonds to 7.5% from 2.5% and bank loans to 5% from 2.5%. The board had also approved the addition of a new target of 5% to private debt, an increase in the domestic equities target to 35% from 25%, and the elimination of the 20% covered calls target and 2.5% real estate investment trusts target.
Targets that remained unchanged were 25% international equities, 20% investment-grade bonds and 2.5% core private real estate.
Specific funding sources for the new portfolios have yet to be determined.
As of June 30, the most recent data available, the actual allocation was 28.3% domestic equities, 24.3% international equities, 21.8% fixed income, 20.6% covered calls, 4.7% real estate and the rest in cash.
Investment consultant Meketa Investment Group assisted.
