The executive director of the $72 billion New York State Teachers’ Retirement System (NYSTRS), Thomas Lee, has been given the discretion to reallocate actively managed international equity assets into passive funds, in line with a board decision to use a blended international equity benchmark, as the fund appoints new consultants to begin from January.
Within international equities, 75 per cent is passively managed to the MSCI AEFE index, and as recommended by Callan Associates this year, 25 per cent is now actively managed to the Morgan Stanley Capital International All World Index ex-US (ACWI ex-US) index.
The restructuring, which will occur throughout the fiscal year, is aimed at reducing portfolio risk and allowing active managers to select from a broad universe of stocks.
The fund has international equities mandates with 10 managers and one fund managed inhouse, with assets allocated to passive (9.6 per cent), emerging markets (4.3 per cent), core active developed countries (30.9 per cent), enhanced passive (35.7 per cent) and benchmark agnostic developed countries (19.5 per cent).
While international equities has a strategic benchmark of 15 per cent it hasn’t reached that allocation for some years, with allocations of 13.25 per cent at the end of June 2008 and 12.12 per cent at June 2009.
The fund has also just announced Ennis Knupp will be its general consultant from January next year and Callan has been named real estate consultant.
At the end of June its consultants were Abel/Noser Corporation, Callan Associates and StepStone Group LLC.