The Montana Board of Investments is proceeding slowly with a new allocation to diversifying strategies, moving forward only after a close board vote and a cautious initial allocation of 0-4% of the overall portfolio.

The board updated its asset allocation targets for the $11.3bn Consolidated Asset Pension Pool in November, including a brand-new target for diversifying strategies. The asset class includes a potentially wide mix of public markets investments that seek to provide downside protection while maintaining liquidity and providing a better return than
just holding onto cash.

Creating a new asset class was necessary, according to CIO Joe Cullen, to allow the state pension funds to take advantage of multi-asset strategies and other investments that otherwise would not fit within the state’s asset allocation structure.

“There’s no place for them in our current portfolio,” Cullen said at the fund’s February meeting. “The opportunity set for diversifying strategies is larger than what we collectively utilize across the other asset classes.”

Read the full story: Montana moves cautiously on diversifying strategies

Published by Money Management Report/Pageant Media.