Indiana Public Retirement System, Indianapolis, committed or invested a total of $4.2 billion to seven alternative investment strategies run by five money managers on behalf of the system's $39.2 billion defined benefit plan, materials from its Oct. 29 board of trustees meeting showed.
The largest allocation — a total of $3.9 billion — will be evenly split between two new derivatives portfolios (one equity portfolio and one fixed-income portfolio) run by existing manager Parametric Portfolio Associates.
The board of trustees approved a new asset allocation on May 7 that added equity and fixed-income derivatives portfolios to complement a cash overlay already managed by Parametric, which totaled $81.2 million as of Sept. 30, the meeting materials showed. With the addition of futures, INPRS' target asset allocation totaled 115%.
Parametric's equity derivatives portfolio utilizes S&P 500 futures to provide passive large-cap equity exposure, and the fixed-income portfolio utilizes long-duration U.S. government bond futures. Both derivatives portfolios are designed to provide passive equity and fixed-income exposure that each targets 5% of defined benefit plan assets, investment staff said in a report to trustees.
As of Sept. 30, INPRS' public equity portfolio totaled $7.4 billion, and its combined fixed-income portfolio (comprising ex-inflation-linked and inflation-linked bonds) totaled $12.2 billion.
INPRS' investment staff began to allocate to the Parametric's derivatives portfolios on Aug. 1, the system's money manager report for trustees showed.
Other allocations made by the system included an additional commitment of $150 million to a separately managed direct lending fund run by Carlyle Group. INPRS' initial allocation to the customized fund was $200 million in 2018.
TCG Capital Management, a new private equity manager for INPRS, was awarded a total commitment of $125 million, with $100 million earmarked for TCG 3.0-A, which targets equity investments in technology-driven, direct-to-consumer middle-market companies, and the remaining $25 million to TCG 3.0 Co-Invest, which will invest in select deals in the main fund.
INPRS also put $15 million of rolled interest from investments previously invested in New Mountain Partners III, a private equity fund, into NMP III Continuation Fund, a new fund. The system committed $50 million to the New Mountain Partners' third fund in 2007.
INPRS' private market portfolio, which includes private equity and private credit, totaled $5.5 billion as of Sept. 30.
Additionally, existing hedge fund manager Kirkoswald Asset Management received an additional $50 million investment from the system's $3.7 billion hedge fund/absolute return portfolio for investment in Kirkoswald Global Macro Fund. INPRS' initially invested $150 million in the emerging-markets global macro fund in 2020.
