Lee Partridge sold his firm, Integrity Capital Services, to investment management firm Salient Partners.
Integrity’s sole client, the $7.7 billion San Diego County Employees Retirement Association, decided to retain Salient as portfolio strategist, confirmed Johanna J. Shick, communications manager for the association, in an e-mailed response to questions.
Mr. Partridge notified the board at its Thursday meeting that he had sold his firm. Mr. Partridge told the board he will be Salient’s chief investment officer and will move to Salient’s Houston headquarters.
Speaking before the board, A. Haag Sherman, Salient co-founder and managing partner, acknowledged that the acquisition of Integrity gives them a new business line that will offer outsourced chief investment management and portfolio strategist services for pension plans for which SDCERA currently is the sole client.
Currently, Salient has $8.3 billion under management. In addition, Salient co-manages a hedge fund of funds with Morgan Creek Capital Management, and has another joint venture to manage timber.
Mr. Partridge said SDCERA is Salient’s only institutional account.
SDCERA “was the seed investor in Lee Partridge, for all intents and purposes, and it is going to be the key seed for institutional business, the large institutional business, for Salient,” Mr. Partridge told the board. “You are the only institutional account we have right now and keeping you happy will be a big thing for us.”
The board decided not to launch an RFP for a new portfolio strategist, which was suggested at Thursday’s meeting by board member and County Treasurer-Tax Collector Dan McAllister.
“SDCERA is pleased with the results we’ve achieved under Lee’s leadership. The fund gained 13.02% or $820.4 million in the fiscal year 2010, outperforming the assumed rate of return by more than $274 million,” Ms. Shick said in an e-mail response to questions. “The acquisition of Integrity by Salient is really no different than changes in ownership that occur with other consultants. … SDCERA is confident that we will continue to get the services we require; that being the case, we intend to continue to have Mr. Partridge consult with us as portfolio strategist.”