Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Innovation Investing Conference
    • 2022 Defined Contribution East Conference
    • 2022 ESG Investing Conference
    • 2022 DC Investment Lineup Conference
    • 2022 Alternatives Investing Conference
Breadcrumb
  1. Home
  2. Print
August 04, 1997 01:00 AM

2 FUNDS DROP, 2 WARN NICHOLAS-APPLEGATE

Linda Kay Sakelaris
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    SAN DIEGO - Nicholas-Applegate Capital Management has been terminated by at least two institutional clients and placed on two pension funds' watch lists.

    The firm is or was a domestic growth equity manager for all four.

    An executive at Nicholas-Applegate said it's not unusual for a money manager to lose some clients when the firm's style is out of favor.

    The $2 billion pension fund of Digital Equipment Corp., Maynard, Mass., terminated Nicholas-Applegate this summer.

    John Cutler Jr., DEC's manager of pension investment analysis, would only say the termination followed a change in asset allocation; Nicholas-Applegate was the only firm terminated as a result of the change.

    No other information was available.

    Nicholas-Applegate also was replaced by the Harbor Fund of Toledo, Ohio.

    Harbor said in a recent proxy statement that Nicholas-Applegate no longer would handle the $86 million Harbor Growth Fund because "trustees did not believe that Nicholas-Applegate could continue to provide the level of portfolio management services that the fund requires."

    Officials with Harbor would not comment further.

    The firm is on probation with the Oregon Public Employes' Retirement Fund and the Sacramento County (Calif.) Employees' Retirement Fund.

    Nicholas-Applegate manages about $441 million for the $25 billion Oregon fund in mid- to small-cap domestic equities, with the Russell 2500 index as a benchmark.

    Rollie Wifbrock, chief of staff with the Oregon Treasury, said Nicholas-Applegate has outperformed the benchmark since the company was hired in 1992. The probation was the result of "organizational issues" at Nicholas-Applegate, not performance, Mr. Wifbrock said.

    Sacramento County officials expressed concern about Nicholas-Applegate's performance. Nich-olas-Applegate manages $85 million in midcap growth equity for the $2.5 billion fund.

    Jeffrey States, chief investment officer, said Nicholas-Applegate was underperforming the benchmark, which is the S&P 400 Mid-Cap Index.

    It is fund policy to warn a manager when a concern exists, Mr. States said.

    "We want to make sure we're communicating to the manager that there's an issue. You want to make sure the manager continues to be the same manager you hired," Mr. States said.

    Arthur Nicholas is one of the firm's founders and is the chief executive and chief investment officer. Mr. Nicholas said it is not unusual for a firm to lose business on a down cycle, such as the pressure now on mid- and small-cap growth stocks.

    "Cycle-wise, it's about as bad as it's ever been," Mr. Nicholas said.

    Nicholas-Applegate manages $32 billion in total assets; its common style is small- and midcap growth equity.

    "You're not always going to be number one, but we have been consistently strong, often in the upper one-third. Our company has never been stronger," Mr. Nicholas said.

    He also pointed out the firm continues to gain new accounts, such as the $6.3 billion Illinois State Board of Investment in Chicago, which has just hired Nicholas-Applegate to manage $50 million in small-cap growth equity.

    In general, the first quarter was hard for small-cap growth, according to data from consultant RogersCasey of Darien, Conn.

    The second quarter was better, but still lags other styles, consultants say.

    Looking at the one-year period ended June 30, small-cap growth managers returned 11.8%, vs. 31.9% for small-cap value, according to RogersCasey.

    Mr. Nicholas said there has been little turnover in the company's investment management staff.

    The company hired a junior trader and a hedge fund manager, but Mr. Nicholas said the only areas with turnover at this time are technology and programming and retail marketing.

    "We've promoted five into the investment arena and hired seven new people," Mr. Nicholas said. The firm has 15 partners, and more than 45 investment management staffers.

    Mr. Nicholas said the firm has acquired 18 new accounts so far this year.

    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    How low is low? Projections say it's not low enough
    How low is low? Projections say it's not low enough
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    Alternatives: Investing Across the Spectrum
    Sponsored Content: Alternatives: Investing Across the Spectrum

    Reader Poll

    May 9, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Are Factors a Thing of the Past?
    Q2 2022 Credit Outlook: Carry On
    Leverage does not equal risk
    Is there a mid-cap gap in your DC plan?
    Out of the Shadows: The Revolution in Shadow Accounting
    The pivotal role of fixed income markets in the ESG revolution
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    May 9, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Innovation Investing Conference
      • 2022 Defined Contribution East Conference
      • 2022 ESG Investing Conference
      • 2022 DC Investment Lineup Conference
      • 2022 Alternatives Investing Conference