United Methodist Church General Board of Pension and Health Benefits, Glenview, Ill., moved its investment management operation and $17.5 billion in assets into a newly formed division, Wespath Investment Management, offering its investment products beyond its traditional limited focus.
Wespath plans to market its investment management services to United Methodist foundations, hospitals, universities and other United Methodist-affiliated institutions, in addition to what has been the board’s traditional focus of investing the assets of pension and benefit plans related to the United Methodists clergy and lay employees.
The expanded market has as much as $3 billion in assets, now managed by other investment advisory firms, Dave Zellner, chief investment officer of the board and CIO of Wespath, estimated in an interview.
In addition, Wespath might market to non-United Methodist institutions for the first time in the future, Mr. Zellner said. That effort would target possibly non-profit institutions. Such an outreach would require Wespath to register with the SEC as an investment advisory firm, Mr. Zellner said. No time frame has been set for this expansion.
Wespath maintains the existing lineup of eight investment funds, managed by 45 external managers, as well as the board’s socially responsible investment focus. Wespath has no plans to add or make changes in the funds at this time, Mr. Zellner said.
“We are taking a long-term perspective to protect the future of our plan participants at a period in history when the number of United Methodists is in decline,” the board said in a statement about the creation of Wespath. “We know in time that the investment base will also decline as the number of people entering ministry decreases. Growing our assets under management will help us to maintain our relatively low cost of service to our customers.”
The board has a good reputation in investment management, demonstrating its socially responsible investment focus can generate competitive returns.
Derek Casteel was hired by the board in January before Wespath was formed to oversee the new division’s marketing and client services effort as managing director. He was institutional marketing director for Community Capital Management.
Wespath has $8 billion in 403(b) defined contribution assets, $6.5 billion in defined benefit assets, and $3 billion in welfare, endowment, operating and other non-pension funds.
The board adopted the name Wespath in honor of John Wesley, founder of Methodism, and in recognition of a goal of “providing clients with the right path to financial growth and a commitment to values-driven investing,” the statement said.
Wespath was created March 31, M. Colette Nies, managing director-communications, said in an interview. “The new name is easier to communicate,” she said.