Wisconsin State Investment Board, Madison, plans to bring more than $2.8 billion in externally managed assets in-house next year, raising to more than 50% the internally managed assets of the $71.2 billion Wisconsin Retirement System, according to a statement from the board.
SWIB currently manages 46% of the assets internally.
The board, which oversees a total of $76 billion in assets, does not yet know from which asset classes or external managers the money will be shifted, said Vicky Hearing, public information officer, in a response to an inquiry.
The board also has not yet determined how it will invest the money that will be taken from external managers, and has no plans to add internal investment staff, she added.
No consultant is assisting in the changes, she added.
The board is moving to increase its internal investment management to lower costs, while expecting to achieve comparable or better performance, she said.
SWIB paid $22 million less to manage the retirement fund last year than a peer group of 14 other large U.S. public pension funds, according to a CEM Benchmarking report released by the board. CEM attributed the lower cost to a greater reliance on its own staff to manage investments, less use of outside firms and paying lower rates for the outside investment services than its peers pay.
“Pension funds with more internal management have lower costs and as a result perform better,” Bruce Hopkins, CEM director, said in the statement.