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Pension board updates investment policy to permit private equity, selects DFA to replace Transamerica
Summary
The pension board approved an amendment to its Investment Policy Statement to allow up to 10% of plan assets in private equity and voted to replace its international developed-value manager Transamerica/TSW with DFA after a presentation comparing managers.
The pension board voted to amend its Investment Policy Statement (IPS) to allow up to 10% of the plan’s assets to be invested in private equity and later voted to replace its international developed-value manager, Transamerica/TSW, with DFA.
Tyler (Presenter) told the board the fund rose from $144,100,000 to just over $149,000,000 during the quarter, and noted a $245,000 capital call to Taurus for private equity. "So that's on the agenda for today, that we're gonna, update the IPS to make that an allowable asset class," Tyler said, explaining the IPS had not yet been updated when the capital call was executed.
Why it matters: the IPS amendment and manager change shift the plan’s strategic allocation and manager lineup. The IPS change authorizes a staged move to private equity — Tyler said the board would pace contributions over several years rather than funding the full 10% at once.
During a manager review, Tyler compared four international developed-value managers (Causeway, DFA, Dodge & Cox, and Transamerica/TSW) on fees, holdings and tracking error, and recommended DFA. "I think DFA is my pick for you guys," Tyler said, citing DFA’s long-term performance, low tracking error and low fees. Following discussion, a committee member moved to change the international developed-value manager to DFA; the motion was seconded and the board approved it.
The board also approved the IPS change in a separate motion. Committee members discussed pacing the private equity allocation to reach the 10% target over multiple years and emphasized not timing the market when implementing the change.
The board took both administrative votes during the meeting; the motions passed and the Chair announced each motion passed. The board did not record a detailed roll-call vote in the transcript; the motions were approved on voice votes.
Next steps: staff and the investment consultant will implement the IPS amendment process, begin pacing private equity commitments over time and initiate the transition from Transamerica/TSW to DFA subject to trade and transition logistics.
