Oregon Investment Council backs plan to manage equities in-house

The Oregon Investment Council is supporting legislation that would allow it to manage equities in-house, saving millions of dollars in fees.

A bill filed in the Oregon Legislature on Monday backed by state Treasurer Ted Wheeler would convert the Tigard-based council into a public corporation, said council spokesman James Sinks in an e-mail.

The Investment Modernization and Cost Reduction Act gives the council — which runs the $57.9 billion Oregon Public Employees Retirement Fund, Salem — the ability to manage its equity portfolio internally and save on the fees.

“One estimate is that we could save $12 million by internally managing large-cap public equities. However, that hinges on building additional capacity in-house” by hiring more investment personnel, Mr. Sinks wrote.

Keith Larson, council chairman said in a written statement: “The act (IMACRA) is a good idea because it improves governance by better aligning responsibility and authority for managing the PERS and other state funds. In addition, the act should save Oregon millions of dollars in fees and enable better risk management.”

The bill maintains the retirement fund's 50% maximum allocation to stocks. It would also establish a board — four members to be appointed by the governor plus the treasurer — as well as create the position of executive director.