City of Knoxville Creates New Allocations
June 18, 2008
The $540 million City of Knoxville Pension Board will meet with consultant Dan Holmes of Summit Strategies next month to discuss ways to implement recently approved allocations, said Mike Cherry, executive director at the fund.
Following the results of an asset/liability study, the plan decided to carve out allocations of 11% to portable alpha, 5.5% each to emerging markets equity and international small-cap equity and 5% each to private energy and private equity, Cherry said. Within fixed-income, the fund will allocate 10% to absolute return strategies and 5% to core-plus bonds.
The Tennessee plan’s current asset targets are 23% each in domestic large-cap core equity and international core equity, 16% domestic small-cap core, 10% core real estate, 7.5% each in core and core-plus fixed-income, 7% hedge funds, 5% convertibles and 1% cash.
“We’re looking at funding the new allocations from the domestic large-cap area,” Cherry said. “ We also have an index that would be the source of funding.”
He added that the board has not decided whether they would scale back investments in these asset classes or terminate managers.
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