OP&F Investment notes, April  2023

Notes from the Investment Committee meetings on April 26

Portfolio value: The OP&F portfolio was valued at $17.3 billion as of April 25

First commodities manager selected for new asset class

Parametric has been selected to manage a $350 million mandate in a new commodities asset class for OP&F. Wilshire Associates and OP&F staff presented the recommendation to hire Parametric after a closed search that was commissioned in December 2022. Both Wilshire and staff independently agreed that Parametric was the clear favorite among the firms responding to the RFP.

Parametric’s strategy seeks to avoid some of the concentrations found in many commodities indices, invest more broadly across commodity types and sectors and includes a number of commodities not found in the broader indices.

The new commodities asset class, approved by the Board in August 2022, has a target of 2.0 percent of the total portfolio.

OP&F commits $40 million to private markets fund

The OP&F Board approved a commitment of up to $40 million to Cortec Group VIII, a private markets fund focusing on the lower middle market, targeting investments in health care, business-to-consumer products, business-to-business products and specialty services and distribution sectors in North America. OP&F also has an investment in Cortec Group VII.

OP&F’s private markets portfolio is valued at $1.44 billion, or 8.3 percent of the total portfolio. The current, interim target for the asset class is 8.5 percent, while the long term target is 10 percent. The commitment to Cortec moves the total 2023 commitments to private markets to $115 million. The target for the year is between $220-250 million.