OP&F Investment notes, January 2020

Notes from the Investment Committee meeting on Jan. 22

Portfolio value

The OP&F portfolio was valued at $16.42 billion as of 1/21

Private markets plan sets target for 2020

The Board approved the recommendation by staff and investment consultant Wilshire Associates for the 2020 Private Markets Investment Plan. The plan calls for between $92 million and $142 million in new commitments during the year, most likely divided into approximately five different opportunities (see below). The private markets portfolio is 8.3 percent of the total OP&F portfolio, or $1.36 billion. The target allocation for private markets is 8.0 percent.

First private markets recommendation approved: $20 million to MBK V The Board approved a recommendation from staff and TorreyCove (OP&F’s private markets consultant) to commit up to $20 million to MBK Partners Fund V, L.P. The commitment is the first of the year as planned by the private markets plan approved in the same meeting.

MBK V specializes in telecommunication/media, financial services and consumer retail opportunities in North Asia (Japan, Korea and China). In 2016, OP&F committed to MBK IV.

Real estate plan for 2020 approved

Tactical portfolio commitments between $110 and $160 million will be targeted throughout this year after the OP&F Board of Trustees approved the 2020 Real Estate Investment Plan. OP&F’s real estate consultant, The Townsend Group, recommended the plan at the Board’s January meeting.

The entire targeted amount will be dedicated to opportunities in the tactical portion of the real estate portfolio. The approved plan calls for the strategic portion of the real estate portfolio to maintain its exposure with possible adjustments based on an upcoming review of OP&F’s open-end funds exposures.

The OP&F real estate portfolio is valued at $1.77 billion, or 10.84 percent of the total portfolio. The target for real estate is 12 percent.

Real assets plan approved for 2020

Townsend also presented its recommendation for the 2020 real assets investment plan, which was approved by the Board. A range of $70 million to $160 million is targeted for the infrastructure portion of the real assets portfolio in 2020, specifically to closed-end funds. The plan calls for a gradual increase in agriculture investments over the longer-term, with no amount or timing specified. The plan noted that no new timberland investments are planned for the year.

The OP&F real assets portfolio is valued at $482 million, or 2.95 percent of the total portfolio. The target for real assets is 5.2 percent.

Posted 1/24/2020