Fresno (Calif.) City Retirement Systems at its meeting Tuesday approved two new private credit commitments totaling $135 million and approved the restructuring of its international equity asset class, said Robert Theller, retirement administrator, in an email.
The joint board of the Employees Retirement System and Fire and Police Retirement System approved commitments of $100 million to Sixth Street TAO, a global multiasset-class fund managed by Sixth Street Partners investing in special situations, middle-market direct lending and distressed credit lending; and $35 million to private credit fund Cloverlay Fund III.
As of Dec. 31, the systems' actual allocation to private credit was 8%; the target is 14%.
The joint board also voted to terminate active emerging equity managers Acadian Asset Management and Axiom Investors based on the recommendation of investment consultant NEPC to simplify the structure of the systems' $981 million international equity portfolio.
NEPC recommended eliminating direct exposure to emerging markets equities to reduce fees and reduce the expected volatility of the international equity allocation, board meeting materials show.
Acadian ran $27 million and Axiom ran $23 million in active emerging markets equities.
The systems' international equity portfolio will now have a 60% active and 40% passive exposure, all benchmarked to the MSCI ACWI ex-U.S. index.
Funding from the terminations will be distributed among existing international equity managers. BlackRock, which currently runs $262 million in passive international equities, will run about $392 million under the new structure.
The systems' two active managers will split the remaining $589 million about 50-50, Mr. Theller said. Baillie Gifford runs $289 million in active international equities and $82 million in active international small-cap equities, and Principal Global Investors currently runs $298 million in active international equities.
As of Dec. 31, the systems' actual allocation to international developed markets equities and emerging markets equities were 23.8% and 1.3%, respectively.
The retirement systems have a combined $3.9 billion in assets.
