Massachusetts Pension Reserves Investment Management's investment committee voted to recommend the full board of the $110 billion Boston-based pension fund hire RBC Global Asset Management (UK) to run $500 million in dollar-denominated emerging markets debt.
Funding would come from PRIM’s existing emerging markets debt managers, leaving total allocations to that asset class unchanged at roughly 1% of the overall portfolio, Richer Leung, an investment officer on PRIM’s public markets team, told the investment committee at a May 6 meeting.
Leung didn’t offer specific figures. According to PRIM’s website, the state pension fund had two emerging markets managers as of its June 30, 2024, fiscal-year close, with London-based Ashmore Investment Management running $442 million and Pacific Investment Management Co. investing $438 million.
With PRIM’s portfolio valued at $105.2 billion as of that fiscal year-end, the combined $880 million in emerging markets debt managed by Ashmore and PIMCO fell short of PRIM’s 1% allocation target by roughly $170 million as of June 30.
In response to a committee member’s question, Leung said PRIM’s investment team is looking to RBC’s emerging markets debt team to deliver “reliable alpha drivers (with) a bit less volatility” than its current managers have delivered.
In addition, he noted, the revamp will result in roughly $1 million in annual fee savings.
The full board is likely to consider the RBC recommendation at its next meeting, scheduled for May 22.
RBC’s strategy — the firm’s Bluebay Emerging Market Debt Strategy — has $5.5 billion in assets under management, according to materials distributed to the investment committee. RBC Global Asset Management (UK) has $503.1 billion in AUM.
