New York City rehires Acadian after 2010 termination

New York City Comptroller John Liu hired Acadian Asset Management after dismissing the company in 2010 for poor performance overseeing $646 million in three city pension funds.

Michael Loughran, spokesman for Mr. Liu, said the city awarded Acadian an $8.37 million contract several weeks ago, without competitive bidding. Acadian will handle investments in emerging markets, Mr. Loughran said.

The five pension funds under the New York City Retirement Systems have a combined $122 billion in assets. Mr. Liu fired Acadian, whose investments for New York included buying Greek stocks, for “underperformance relative to the market.”

“It's two completely different teams, two completely different regions of the world,” Mr. Loughran said.

Acadian was one of four companies awarded contracts in a process called “innovative procurement,” Mr. Loughran said. The comptroller's office and pension board members decided that traditional bids often failed to attract quality firms and took too much time, he said.

“We found that best-in-class managers weren't responding to our requests for proposals, limiting the talent pool we could select from, and the traditional bidding process sometimes took 17 months to hire a manager when we needed to be nimble,” Mr. Loughran said.

From July 2007 through May 2010, the $286 million Acadian managed in the New York City Employees' Retirement System lost 19.4%; its $263 million from the New York City Police Pension Fund lost 17.1%, and the $97 million it oversaw in the New York City Fire Department Pension Fund also lost 17.1%, Mr. Liu's office said.

The pension funds paid Acadian at least $7.2 million in management fees during the period, the comptroller's office said.

Ross Dowd, Acadian's senior vice president and head of global marketing, didn't return voice mail messages.