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Ohio PERS outlines alternative assets plan

The pension system is shifting its target private equity exposure from 12 percent to 15 percent. 

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  • Institution: Ohio Public Employees Retirement System
  • Headquarters: Columbus, US
  • AUM: $87.9 billion
  • Allocation to alternatives: 28.6%

Ohio Public Employees Retirement System plans to increase its alternative asset allocation by 6 percent in 2023, according to materials from its 15 November retirement board meeting.

The pension system is looking to up its exposure to private markets from 27 percent to 33 percent going into 2023. Part of this change involves a shift in their target private equity exposure from 12 percent to 15 percent.

The asset allocation proposals were finalised following a mixed recommendation between Ohio PERS staff and NEPC, the investment consultant to the pension’s private market opportunities. The changes are being facilitated by aligned reductions in the public sphere, with a drop in both public equities and fixed income.

NEPC’s Private Markets group works with clients as part of general consulting mandates and as part of specialised, stand-alone private markets mandates. Its services include developing the investment policy, overall allocation and strategic planning, manager search and due diligence reviews, performance monitoring, and education.

Ohio PERS has outlined its reasoning for the changes, highlighting a wish to tackle the challenging investment returns felt by LPs across the globe, as well as the continuation of stagflation dynamics, which reinforces the need for strong management and diversification of its private markets’ investment programme.

Currently, Ohio PERS maintains a fairly diversified private equity portfolio composition, with 34 percent allocated to growth and buyout strategies, and a further 8.5 percent slated for secondaries and venture capital. The remaining 15 percent is dedicated to non-US private equity opportunities.

The $87.9 billion public pension currently allocates 15.1 percent of its total investment portfolio to private equity, comprising almost $13.3 billion in capital. Its recent private equity fund commitments have focused on buyout vehicles that invest globally but have a focus on North America.

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