Cincinnati Retirement System adopted a new asset allocation, which includes changes to the structures of its equity and fixed-income targets and an increase in the target to global infrastructure.

The $2.1 billion pension fund’s board approved the new allocation in November following the completion of an asset allocation study by investment consultant¬†Marquette Associates, confirmed Beverly Nussman, the system’s finance manager.

The overall targets to domestic equities, international equities and fixed income remain at 27.5%, 23% and 14%.

Within domestic equities, the board approved a new target to all-cap core strategies of 18.5% of the overall pension fund, the reductions of small-cap value to 3.5% from 7.5%, large-cap value to 3.5% from 7%, and midcap value to 2% from 4%, and the elimination of targets of 5% to large-cap growth and 4% to midcap core.

Within international equities, the board approved a new target of broad international equities of 20% of the overall pension fund, and the elimination of targets of 10% to developed markets large cap and 5% each to developed markets small cap and emerging markets. The target to emerging markets small cap remains at 3% of the overall pension fund.

Within fixed income, the board approved a new target of 6% of the overall pension fund to broad fixed income and the elimination of the 6% target to universal fixed income. The targets to core plus and opportunistic credit remain at 6% and 2%, respectively.

The target to hedge funds remains at 5%, although the pension fund changed the parameters to defensive equity strategies from global macro strategies.

The overall target to illiquid assets was increased to 23% from 20.5%. Within illiquid assets, the pension fund increased its target to global infrastructure to 10% of the overall pension fund from 7.5%, reduced the target to private equity funds of funds to 8% from 10% and created a new 2% target to venture capital funds. The target to private equity mezzanine funds remained unchanged at 3%.

Finally, the target to core real estate was reduced to 7.5% from 10%.

As of Sept. 30, the actual allocation was 27.8% domestic equities, 22.9% international equities, 17.5% fixed income, 9.9% real estate, 8.7% private equity, 7.9% infrastructure, 4.5% risk parity and the rest in cash equivalents.

Source: Pionline