Ohio STRS Cuts Equity Targets by 13 Points as $108 Billion Fund Warns on Recession Risk
Updated
Updated · Top1000funds.com · Jul 2
Ohio STRS Cuts Equity Targets by 13 Points as $108 Billion Fund Warns on Recession Risk
1 articles · Updated · Top1000funds.com · Jul 2
Summary
Ohio STRS said US recession risk has risen materially over the next 12 months, with internal managers assigning a 23% probability even as the fund keeps steady Fed rates and trend growth as its base case.
The $108 billion pension is responding by trimming long-term equity targets—domestic to 19.25% from 26% and international to 15.75% from 22%—while adding Treasuries, core-plus fixed income and a 7% liquid-alternatives target.
Liquidity is a central concern for the fund, which has about $4 billion in annual negative cash flow; it raised its liquidity Treasury allocation to 5.5% and created a new 3% long Treasury portfolio.
Private markets remain a major outlet for capital, with $1.1 billion-$1.5 billion of new private-equity commitments and $1.4 billion-$2.2 billion for private credit, alongside a property shift toward residential and industrial assets.
The changes come as the plan's funded ratio stands at 81% and its key long-term risk remains missing its 6.42% actuarial return target, a threat that would worsen if recession coincides with negative portfolio returns.