Money manager Aletheia Research and Management Inc. continues to see significant drops in its assets under management from client terminations and market losses. The company also lost its new president, hired to help stabilize the firm, after just seven months on the job.
The Santa Monica, Calif.-based boutique manager, whose specialty is large-cap growth equities, reported assets of $3.39 billion as of Sept. 30, according to a 13F filing with the Securities and Exchange Commission. That figure was down 39% from the $5.598 billion Aletheia reported to the SEC as of June 30.
Aletheia General Counsel J. Jorge deNeve said the SEC filings understated Aletheia's total assets: wrap accounts, for example, were not included. He said the company's AUM was $6.9 billion as of June 30 and $4.4 billion as of Sept. 30. There was a slight recovery in October to $4.8 billion, the last month that Mr. deNeve was able to calculate.
But no matter which numbers are used, the manager has lost significant assets.
Losses since the beginning of July include:
- a $350 million large-cap growth mandate for the $49 billion State of Michigan Retirement Systems, Lansing;
a large-cap growth account of between $50 million and $75 million for the $1.75 billion Ewing Marion Kauffman Foundation, Kansas City, Mo.;
- an approximately $18 million equity mandate for the $890 million Wayne County Employees' Retirement System, Detroit;
- a $13 million large-cap growth mandate for the $336 million City of Fort Lauderdale (Fla.) General Employees Retirement System;
- a $13 million large-cap growth mandate with the $138 million Sarasota (Fla.) Police Officers' Pension Plan; and
- an approximately $5 million all-cap value portfolio for the $23 million City of Pinellas Park (Fla.) Police Officers Pension Board.
Aletheia also has sustained major losses on its retail platform. The private wealth management group of Goldman Sachs took Aletheia off its recommended list for brokers over the summer, said spokeswoman Andrea Raphael. Knowledgeable sources said Aletheia will lose at least several hundred million dollars because of Goldman's decision.
Aletheia also is on the watchlist at Morgan Stanley, confirmed spokeswoman Christy Pollak. And Matthew Card, a spokesman for Bank of America Merrill Lynch — another broker that has Aletheia on its platform — said: “We do not have anything called a watchlist, though we are watching this. As with all of our platforms, we continue to monitor developments with our investment partners in order to ensure our offering is in the best interest of our clients.”
Mr. deNeve said many of Aletheia's institutional clients remain committed to the money manager, but for confidentiality reasons he could not name them. As for retail investors, Aletheia before the start of 2011 was on 10 “platforms and only one of these platforms made a decision to move away from Aletheia in 2011, which they are doing over a seven- to eight-month period.”