Some of the emerging managers terminated by the Ohio Bureau of Workers Compensation a year ago are having an easier time than others.
The decision by the Columbus-based fund to terminate 69 active managers, including 47 emerging, women-owned and minority-owned firms, followed a recommendation by a management review team appointed by Gov. Robert Taft that sought to improve cash flow, reduce risk and preserve assets following a bad coin and hedge fund investment (Pensions & Investments, Oct. 3, 2005).
The loss of a large client like the $15 billion Ohio BWC could potentially spell ruin for emerging investment management firms — generally defined as those with $2 billion or less in assets — but a few of the managers are holding up relatively well.
"The beautiful thing is that we didn't have a run on the company, which some had feared," said Randall Eley, president of Edgar Lomax Co., Springfield, Va., a large-cap value equity manager that ran $300 million for the Ohio fund.
At least one manager interviewed by Pensions & Investments will soon be signing contracts that will raise assets back to levels seen before the Ohio decision. Other managers are still trying to recoup most of the lost assets, but headwinds such as a strategy being out of style haven't helped.
According to data from eVestment Alliance, Atlanta, the asset growth picture is fairly mixed for the emerging, minority and women-owned managers for which data were available. Six managers reported a collective net asset gain of $400 million for the six months ended June 30 and five reported a combined net asset loss of $406 million during the same period.