University of Houston System's endowment management committee approved hiring active equity managers Acadian Asset Management and Independent Franchise Partners to run $30 million each for the system's $1.2 billion endowment.
The committee approved the hiring of Acadian to manage an active international equity portfolio and IFP to run an active global equity portfolio at its Feb. 19 meeting, a webcast of the meeting showed.
The hirings were the result of investment consultant NEPC’s recommendations to rebalance the endowment’s equity and fixed-income allocations to their policy targets of 45% and 10%, respectively.
The committee also approved adding $30 million to an existing passive domestic all-cap equity portfolio managed by Northern Trust Asset Management, increasing it to $158 million and reducing an active domestic high-yield fixed-income portfolio managed by Barings by $23 million to $24 million; an active short-duration fixed-income portfolio managed by Lord, Abbett & Co. by $20 million to $29 million; and an active domestic core fixed-income portfolio managed by Loop Capital by $10 million to $34 million. The committee did not address the remaining $6 million.
Also, NEPC informed the committee of a $10 million commitment to lower-middle-market buyout fund Frontenac XIII Private Capital. The system previously committed $10 million to Frontenac XII Private Capital in 2021.
NEPC also informed the committee of the termination of active emerging markets equity manager Oldfield Partners. Samuel Pollack, partner at NEPC, said in the webcast that performance was not an issue, but the firm had experienced “material personnel changes and a dramatic decline in assets,” and the consultant in its delegated authority decided to terminate the manager before the Feb. 19 meeting.
As of Dec. 31, the endowment’s actual allocation was 38.9% public equities, 34.4% private markets, 17.1% bonds and cash, 7.8% hedge funds and 1.8% liquid real assets.
