The $400 million New Orleans Employees Retirement System is considering hiring bank loan managers within the next three months. Jerry Davis, chairman of the board, said the fund intends to search for fixed-income managers that can deliver impressive returns. "We are casting the broadest possible net for a fixed-income strategy which will produce returns closer to our actuarial assumption of 7.75%," he said. The fund is considering bank loans, credit-card portfolios and auto-financing portfolios, among other strategies.
New bond managers will supplement the fund's three domestic fixed-income managers, which together manage $72 million: Aberdeen Asset Management, Orleans Capital Management and EARNEST Partners. They have performed on par with the Lehman Brothers Intermediate Aggregate benchmark, which returned 3.27% year to date as of Sept. 30. "Our allocation to fixed income is the lowest it's ever been, and we'd like to raise it if we can find a good investment with acceptable risk parameters," Davis said. Mandate sizes will depend on what strategies the fund comes across.