No sitting on the sidelines and no panicking serve as rallying cries of pension funds in these days of capital market turmoil.
The Iowa Public Employees' Retirement System, Des Moines even as it posted on its website a statement reporting an estimated $46 million loss from its Lehman-related investments provided reassuring words about its $23 billion fund in the unprecedented crisis in the markets.
Although the financial markets are troubling, IPERS is not panicking, Donna M. Mueller, CEO of the fund, said in the statement. IPERS is a long-term investor with a portfolio that mixes many types of investments. A diversified portfolio limits the impact when any one company fails.
The $87 billion State of Wisconsin Investment Board, Madison, in a statement on its website stated, Sitting on the sidelines waiting for calmer markets is not an option for public pension fund investors.
The $14.8 billion Indiana Public Employees' Retirement Fund, Indianapolis, in a statement on its website noted, While the stock market was booming in 2006, PERF's investment professionals were ... implementing an asset allocation designed to protect the portfolio from market downturns.
With about 65% of our portfolio in the public equity market, we will feel an impact, Shawn Wischmeier, CIO of Indiana PERF, said in the statement. However, our overall asset allocation is designed to manage this sort of risk through diversification to mitigate the overall impact on the fund.
What is PERF doing now? the statement posited. The investment staff is not "day trading' or "playing the market,' but relying on a prudent long-term investment strategy focused on managing risk through diversification. Barry B. Burr