Ohio Health Care Fund Targets 5% For Private Equity

Sep 19 2007 | 8:16am ET

The $80 billion Ohio Public Employees Retirement System is revamping its $13 billion healthcare fund to include a 5% allocation to private equity.

During its July meeting, the system’s investment committee decided to shift its allocation to a 60% equity plus alternatives and 40% fixed income mix.

The new equity portfolio includes a 24.5% allocation each to domestic and international stocks, 6% to real estate investment trusts and 5% to private equity. The fixed-income portfolio has a 20% target for Treasury inflation-protected securities, 10% to global bonds and 10% to short-duration bonds.

The healthcare fund’s current allocation is 30% U.S. equity, 15% international equity, 15% global bonds, 5% REITs, 20% TIPS and 15% short-duration bonds, but no allocation to private equity. Trustees approved the changes, which were recommended by Mercer Investment Consultant, on Sept. 11. Mercer was selected as OPERS’ generalist consultant in May, replacing Ennis Knupp + Associates.

Mercer estimates that the new private equity allocation has an expected real compound return that is 0.5% per annum higher than for the current allocation “with only a slight increase in expected risk as measured by standard deviation of returns.” Mercer also projects that it will take roughly seven years to transition to the new p.e. allocation, assuming that the system implements the p.e. allocation in 2008. In the interim, while p.e. commitments are being funded, Mercer recommends system hold the remainder of the target allocation to p.e. be held in U.S. equity.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Top 5 Predicted Outcomes Of CalPERS' Hedge Fund Divestment

Sep 22 2014 | 8:35am ET

CalPERS’ announcement to divest of hedge funds has created a significant buzz...

 

Videos

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.