The board of Kern County Employees' Retirement Association, Bakersfield, Calif., has approved commitments totaling $150 million to invest in Japanese public equities.
Specifically, KCERA committed $100 million in the Lazard Japanese equity strategy of Lazard Asset Management and $50 million in the Dalton Japan long-only strategy of Dalton Investments.
Japan public equities are "an attractive opportunity given positive fundamentals and structural change, including corporate governance reform, that creates the opportunity to unlock shareholder value, and cheap valuations on both an absolute basis and relative to other developed market peers," according to the agenda for the Sept. 13 board meeting.
As of July 31, KCERA had $5.46 billion in assets, with a 12% actual allocation to developed market equities.
Lazard is expected to invest in "companies that are positioned to benefit from the structural changes in Japan and incorporate engagement in its investment philosophy," the minutes noted, while Dalton is expected to "focus on identifying companies in the small and mid-cap space."
Daryn Miller, CIO of KCERA, said the commitments will be largely funded through a partial redemption of the BNY Mellon Defined Benefit Securities Lending World ex-U.S. Index Fund.