The $1.74 billion Seattle City Employees Retirement System is interested in talking to firms that offer structured credit strategies, such as collateralized debt or loan obligations. Mel Robertson, assistant executive director, said he is intrigued by the asset class because he favors debt investments and structured credit has been enjoying double digit returns during the past few years. "It seems too good to be true," he said. He predicted that the fund would allocate approximately $15 million.
Robertson said he has talked to one East Coast firm, but has yet to meet with representatives in person and wants to do so at least once before assigning an allocation. The fund may issue an RFP on its Web site, but Robertson said a decision has not been finalized.
The fund recently completed a routine asset allocation study, which was performed by Wurts & Associates. The last study was done two years ago. The fund is increasing its allocation to 12% from 10% in real estate and adding two or three more mezzanine managers to receive approximately $15 million apiece. The real estate commitments have already been made and the fund is currently shuffling through a stack of proposals from mezzanine managers. The fund is reducing its allocation to fixed-income to fund real estate and mezzanine managers.
