"It's any plan sponsor's duty, when they become aware of a situation that may have an impact on the plan, to investigate," he said. "More than anything else, I would focus on whether there realistically is a chance of a run that could affect the investments – a sudden, very large outflow of assets that could drive up fees or cause problems in managing the portfolio."
He said the other major consideration is whether the issue could cause management to "take their eyes off the ball" in running the portfolio or cause key people to leave.
Craig Husting, chief investment officer of the $22.8 billion Missouri Public School Retirement System, Jefferson City, said the system is conducting a comprehensive review of INVESCO Global, which runs $900 million in active international equities for the system. He said that review implies lower concern than placing a manager on watch.
The $1 billion Chicago Firemen's Annuity & Benefit Fund also is considering its investment with INVESCO Global, which runs a $25 million international core portfolio for the plan, said Michael Moran, comptroller. The fund's investment committee will meet Dec. 15.
Karen Sharma, spokeswoman for Massachusetts Treasurer Timothy Cahill, declined to use the term "watch" regarding its actions toward INVESCO Realty. Instead, she said the $30.5 billion Massachusetts Pension Reserves Investment Management Board, Boston, was conducting a due diligence review, including meeting with INVESCO officials. INVESCO Realty manages $387 million in a direct real estate fund for the board.
Several defined contribution plan officials contacted by Pensions & Investments declined to comment on their relationships with INVESCO.
Bill Hensel, spokesman for INVESCO parent AMVESCAP, Atlanta, said the company has been in constant communication with clients regarding the situation, but with increased urgency.