Indiana Public Retirement System, Indianapolis, hired State Street Global Advisors to replace BlackRock in managing an $850 million customized passive global inflation-linked fixed-income portfolio for its $44.7 billion defined benefit plan.
The retirement system disclosed the hiring by investment staff in materials for its Feb. 28 board meeting.
The board at its previous meeting Dec. 13 determined SSGA along with Northern Trust Asset Management and UBS Asset Management’s similar strategies all had comparable performance to the BlackRock strategy, and it would not be violating its fiduciary responsibilities by complying with Indiana Treasurer Daniel Elliott’s June 2024 action to place BlackRock on a watchlist due to BlackRock’s environmental, social and governance-related investments.
The retirement system had issued an RFP in July following Elliott’s announcement, saying a replacement would be hired only if at least one manager displayed comparable performance history to BlackRock’s strategy.
In a June 19 letter to Abhilash Reddy, Elliott’s chief of staff and legislative counsel, Peter Vaughan, managing director and senior counsel at BlackRock, said its portfolio is a customized passive strategy that tracks the performance of the Barclays Global Inflation-Linked 1-10 Years USD Hedged index and excludes exposure to the U.S., Italy and Spain, and it does not have any ESG component or screen.
As of Jan. 31, the pension plan’s actual allocation to inflation-linked fixed income was 13.6%.
