The $4 billion Philadelphia Public Employees Retirement System plans to issue a request for proposals this month for opportunistic credit managers to take advantage of available investments in the space. CIO Chris McDonough is not yet sure how much money would be dedicated to the category. The fund has a 10% target allocation to global opportunistic fixed income, and about 6% is invested. Philadelphia has also recently terminated Aberdeen Asset Management from a $200 million core-plus bond mandate for poor performance and organizational changes.
The plan's investment staff is in the process of defining criteria for the opportunistic credit RFP, but McDonough said it will be broad. The search can include traditional and alternative credit managers. It won't include high yield, as the fund recently hired dedicated high-yield managers (MML, 3/9).
Aberdeen's money will be distributed to incumbent managers handling index bond funds and mortgage strategies and some will be kept in cash to pay benefits, McDonough said. The firm's core plus strategy returned -14.06% for the year ending Dec. 31, while the Barclays Capital Aggregate Bond Index was at 5.24%, according to Informa Investment Solutions' PSN Database.
The personnel changes at the firm included the departure of Gary Bartlett, global head of fixed income, and a portfolio manager who focused on mortgages. Bartlett was replaced by Paul Griffiths, who was previously in a similar role at Credit Suisse Asset Management. Aberdeen acquired parts of CSAM's business earlier this year. Sue Mullin, head of consultant relations at Aberdeen, did not return calls by press time.
--Anastasia Donde
