Orange County Employees Retirement System (OCERS) has hired Argo Infrastructure Partners and BlackRock as it looks to create a 2% infrastructure allocation.
The $13.1bn (€12.3bn) pension fund has set up a $130m separate account with Argo and has committed $130m to BlackRock’s Global Renewable Power Fund II, according to a board-meeting document.
The move to create a separate account is understood to be relatively unusual for a US public pension plan, as most opt for commingled funds.
As part of the separate account, OCERS will be able to invest alongside Argo’s AIA Energy North America platform. The California State Teachers’ Retirement System (CalSTRS) and Dutch pension fund manager APG are cornerstone investors in AIA.
Argo will focus on the US and Canada, including renewables and thermal generation/transmission, pipelines and regulated midstream, and energy and water assets.
The 15-year separate account will target existing assets, with limited exposure to development, and will target returns of 9% (net) and 10% (gross).
According to OCERS, the BlackRock fund will be active mostly in the US but will also be able to invest in Europe, with a particular focus on Norway.
It will target operational and construction-ready wind and solar assets.
The core-plus strategy is targeting returns of 9-10% (net) and 11-13% (gross).
The commitments were made on the recommendation of consultant Meketa Investment Group.