While we all feel for minority- and women-owned money management firms that are attempting to develop their business in the pension consulting area, it is not an issue that should be addressed by mandate or statute change.
It has been a common practice in the highway and general construction industry to finance a minority- or women-owned company in order to receive construction contracts from the federal and state governments that would be directed to such a firm.
As you state in your editorial, "All of these moves have made Illinois a mecca for" such firms.
The five-year minimum return record and minimum asset bases are in place for a reason. While track records can be built at other firms, and assets can be gathered and managed for endowment funds, foundations, high-net-worth individuals and corporate funds, to force a mandate on pension funds would violate the dictate that pension funds be managed solely for the benefit of participants.
To ask for special treatment in waiving the five-year track record of minimum asset base is inappropriate.
Gary F. Forte
investment management consultant