Santa Barbara County Employees’ Retirement System has hired Cohen & Steers, Nuveen Asset Management and BlackRock to manage its $167m (€141m) “real return” portfolio.
The pension fund confirmed to IPE Real Estate that the investment managers will invest in listed real estate, infrastructure, natural resources and commodities on a global basis.
The real return portfolio, which represents 6% of the Santa Barbara County’s $2.78bn investment porfolio, was set up to augment the real estate porfolio and provide a hedge against inflation.
Cohen & Steers and Nuveen will each manage 40% of the real return portfolio, investing in real estate investment trusts (REITs), infrastructure and natural resources.
The remaining 20% will be invested in Treasury inflation-protected securities (TIPS), managed by BlackRock.
The investments will be funded by liquidating its interests in two commodities funds, a natural resources fund and an infrastructure fund.
Santa Barbara County is selling out of Mount Lucas Commodity Long/Neutral, BlackRock DJ UBS Commodity Index, SSgA Global NR Stock Index, and RARE Infrastructure Global Value.
According to a board meeting document, Santa Barbara County will not rule out considering Mount Lucas and RARE for other investment searches in the future, and the pensioin fund has other existing mandates with BlackRock and SSgA.
The new mandates are the result of an invitation to bid for diversified inflation strategies issued in June.
The move was recommended by the pension fund’s consultant RVK as part of an analysis of the pension fund’s real-return strategy in April.
