Searches and Hires

Washington goes with BlackRock as passive equity manager for insurance funds, expands consultant pool

Updated with correction

Washington State Investment Board, Olympia, hired BlackRock (BLK) to manage about $2.2 billion in passive global equities for the $16.9 billion Labor & Industries' Funds, said Chris Phillips, spokesman.

The board, which oversees $124.6 billion in assets including $97.8 billion in defined benefit plan assets, approved the hiring following a staff search that began in May 2017. That search was the result of a February 2017 decision by the board to consolidate the Labor & Industries' Funds' equity portfolio into a single global equity portfolio. Funding comes from BlackRock's $1.1 billion passive domestic equity portfolio and State Street Global Advisors' $1.1 billion passive international equity portfolio. The Labor & Industries' Funds are state insurance funds.

Separately, the board rehired BlackRock as its global cash and short-term investment fund manager. The board conducted a search beginning in August 2017 because BlackRock's contract was due to expire in June 2018. BlackRock manages a $529 million institutional government money market fund and a total of $495 million in three short-term investment funds in three defined contribution plans the board oversees.

Also, the board added Meketa Investment Group and Wilshire Associates to its prequalified consultant pool, bring the total number of consultants in the pool to seven. The board issued a request for qualifications and quotations in June 2017. The RFQQ was issued because the contracts of the five existing consultants in the pool were due to expire on Dec. 31, 2017. Those five consultants, all of which remain in the pool, are Aon Hewitt Investment Consulting, Callan, Mercer, Pension Consulting Alliance and RVK.

"WSIB's prequalification of general consultants means these firms will have optional-use contracts with the WSIB, allowing the WSIB to utilize any of these consultants for project-specific work on an as-needed basis," Mr. Phillips said in an email.

Finally, the board approved plans for commitments in 2018 to its private equity, real estate and tangible assets portfolios totaling $6.75 billion, $2.5 billion and $2 billion, respectively. The tangible assets portfolio focuses on upstream and midstream investments in energy, agriculture, minerals/mining, and society essentials. In 2017, actual commitments to private equity, real estate and tangible assets totaled $4.6 billion, $2.4 billion and $1.7 billion, respectively.

As of Sept. 30, the actual allocations to private equity, real estate and tangible assets among the board's entire portfolio were 20.6%, 17% and 3.5%, respectively.