Russell Investments transitioned more than $86 billion for public pension funds in North America during the second half of 2009, more than triple its first half total.
With the return of more stable market conditions, plan executives were able to focus again on “high level strategic decisions,” said Steve Kirschner, the firm’s head of transition management, Americas, in an interview.
One theme of that recent public fund activity was greater demand for indexed exposure in market segments, such as U.S. equities, deemed difficult for garnering consistent alpha. In a news release, Russell noted that it just completed a complex $3.7 billion transition for the $9.2 billion Maine Public Employees Retirement System, Augusta, following a decision by Maine’s board of trustees to shift the majority of its active public market assets into beta strategies. Andrew Sawyer, MainePERS’ chief investment officer, wasn’t immediately available for further comment.
In the interview, Mr. Kirschner said the pickup in demand for transition services to execute strategic changes last year was broad based. While there seemed to be a bit of a herd mentality in the years leading up to the recent crisis, with everyone moving in a similar direction, there has been much greater diversity in the strategic decisions being made over the past half-year, he said.
For the current year, demand for transition services appears set to remain healthy, and Russell is adding to its transition management team globally, he said. For all of 2009, Russell’s transition management services team moved more than $581 billion in assets. And while the recent crisis left asset levels down from a year or two before, Russell managed a company record 733 “transition events globally” last year, up 5.6% from 2008 and up 2.1% from 2007, according to data provided by the company.