Phoenix City Employees’ Retirement System committed $100 million to PIMCO Private Income Fund Onshore Feeder.
The $3.6 billion pension fund’s board approved the commitment to the evergreen private credit fund managed by Pacific Investment Management Co. at its Aug. 1 meeting, said Greg Fitchet, investment officer.
The pension fund’s target allocation to private debt is 3%. As of June 30, there was an actual allocation of zero.
Funding for the new commitment will come from an active domestic short-duration fixed-income portfolio managed by Western Asset Management. Fitchet said the board approved the termination of the portfolio at its Oct. 3 meeting. Fitchet said the termination was due to recent developments at the firm regarding Ken Leech.
A number of pension funds in the past two months have terminated Western Asset Management after the Aug. 21 announcement by Western Asset’s parent company Franklin Templeton that the SEC had issued a Wells notice to then co-CIO Leech, identifying him as a target of an investigation focusing on “past trade allocations involving Treasury derivatives." Leech has since stepped down as co-CIO and fellow co-CIO Mike Buchanan has taken on sole CIO responsibilities.
As of June 30, the actual allocation to short-duration bonds was 10.2%; the target is 7%.
Investment consultant Meketa Investment Group assisted.