Western Conference of Teamsters Pension Trust, Seattle, delegated full discretionary authority to hire and fire investment managers to Alan D. Biller and Associates, confirmed Rome Aloise, co-chair of the trust’s investment committee.
The trust “has delegated authority to the Biller firm to hire, fire and allocate funds to money managers, along with deciding diversity of our investments within our guidelines,” Mr. Aloise said in an e-mail.
“We delegated authority because we wanted to be more efficient and wanted to be able to faster invest funds once managers have been chosen. Biller has been our investment consultant for over 20 years and has done an excellent job for us,” Mr. Aloise, who is also an international vice president of the International Brotherhood of Teamsters, said in the email. “We did not search for other consultants, as we felt the Biller firm, based on the many years of our relationship, is almost an ‘in house’ manager. We are the largest and primary client of his firm and believe the firm’s major focus is our trust.”
“We have not increased the firm's compensation,” Mr. Aloise added.
The board’s investment committee in September approached the Biller firm, which has been the non-discretionary consultant to the $32 billion trust since 1986, about delegating implementation of asset allocation policy, said Alan D. Biller, president.
This month, the board authorized the change in authority, delegating discretion to Biller for the assets of the multiemployer plan, Mr. Biller said.
“We have discretion to manage the portfolio,” Mr. Biller said. “So we can hire and fire managers. We can manage the assets within guidelines set by board and the investment committee.”
That includes varying asset allocation within ranges set by the committee, Mr. Biller said.
Mr. Biller said his primary focus will be on $26 billion, with some exceptions he didn’t specify. The remaining $6 billion is in a group annuity and a dedicated bond portfolio, both run by Prudential, Mr. Biller said.
Mr. Aloise said in the e-mail, “Mr. Biller does not manage the portion allocated to Pru; however, he does review their investment vehicles. We have a guranteed contract with Pru for those funds.”
As of Sept. 30, the Teamsters total fund was invested 38.2% in domestic fixed income, 30% in domestic equity, 11% in real estate, 10.7% in other alternatives, 6.4% in international equity, 2.7% in private equity and 1% in cash, according to information provided to Pensions & Investments by the Western Conference.
The assets include real estate debt, infrastructure, commodities, one hedge fund of funds and a convertible arbitrage strategy that the trust doesn’t consider a hedge fund because of its structure, Mr. Biller said. “We have generally avoided hedge funds because of oversight considerations and also high-fee structures,” Mr. Biller said.