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Department of State Treasurer and Investment Advisory Committee Discuss Asset Allocation, Placement Agent Review and Governance Study

Additional transparency, accountability, and ethics reforms implemented 

RALEIGH, NC-- At the quarterly meeting of the Investment Advisory Committee, the Department of State Treasurer provided an analysis of asset allocation for the NC Retirement Systems (NCRS), a discussion of new policies involving placement agents and an update on efforts to study the investment governance structure.

Within the asset allocation review, Buck Global Investment Advisors and the Investment Management Division presented the current investment asset allocation, expected future returns, and investment risk measures for the NCRS. The presentation also included potential allocation changes and took into consideration the extended 30-year economic outlook, the current strong funded status and the Retirement Systems' management of risk through portfolio diversification.  Based on the discussion and the feedback received today, a recommendation for adjustments to the asset allocation structure will be presented at the next quarterly meeting in February.   The committee discussed maintaining North Carolina’s traditional conservative investment strategy, but improving long-term diversification in light of economic and financial risks.

In addition, the Department of State Treasurer's General Counsel, Jay Chaudhuri, and the Independent Counsel of Kellogg, Huber, Hanson, Todd, Evans, and Figel (Kellogg Huber), which was retained by the Department of Justice, presented the results of a Special Review of the historical use of placement agents and recommendations for potential reforms. Placement agents serve as third-party solicitors or brokers for investment managers who are interested in managing money for institutional investors, including pension funds.

Since Treasurer Janet Cowell took office in 2009, she has implemented a series of policy reforms that support ethics, transparency, and accountability.   Based on Kellogg Huber’s Special Review, the Department has adopted a revised Placement Agent Policy that includes enhanced disclosures and more stringent remedies.  In addition, the Special Review sets forth recommendations for statutory changes, including a requirement that placement agents register as lobbyists.  The Department of State Treasurer will work with the General Assembly to enact these recommendations.

"My top priority is to ensure the integrity of the investment process," said Cowell. "I've focused on transparency, accountability, and ethics reform since I took office.  This Special Review and the recommended policy changes are another example of this focus and build upon my reform efforts."

Treasurer Cowell announced that the Department will take steps in early 2014 to review the governance structure for investment management.

"As part of my ongoing focus on reform, I want to make sure that we appropriately assess the governance structure for the State's investments.  I am announcing a commission to explore this issue and to make recommendations,” Cowell said.

The Investment Advisory Committee materials

Special Review report​


The North Carolina Retirement Systems, the formal name for the pension fund, is now the eleventh largest public pension fund in the country. It provides retirement benefits and savings for more than 875,000 North Carolinians, including teachers, state employees, firefighters, police officers and other public workers. For more information, visit​