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Sean Bill Benedicte Gravrand, Opalesque Geneva: An investment manager and board member of two US pension plans talks about the plans' new allocations, and investing in hedge funds.
"With the recent drift down rates, we decided that we need to look at our fixed income portfolio, and the expected return for the Barclays Agg on a ten-year expected returns moving forward is about 2.5%. So we wanted to try to find some other alternatives where we are going to have a higher income," Sean Bill, Investment Program Manager at the Santa Clara Valley Transportation Authority (VTA), told Protégé Partners’ Chief Investment Strategist Michael Weinberg on Opalesque TV.
The investment managers at the Santa Clara VTA recently completed a strategic asset allocation and decided on a lower weighting in the fixed income allocation, from 33% to 25%, and to add some high yield credit, Bill added. At the San Jose Police and Fire Department Retirement Plan, where he sits on the board, the managers took a more tactical movement to the portfolio; "We went from 27% as our strategic asset allocation, and tactically we are currently underweighted by 5 points or 5%."
In terms of overweight positions, the San Jose plan is overweight in the GTA space, increasing the allocation from 10% to 15% (split between three managers; GMO, Standard Life and Pimco). At the Santa Clara plan, the managers spread the alloca...................... To view our full article Click here
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