St. Paul (Minn.) Teachers' Retirement Fund Association on July 1 switched to U.S. Bank as global custodian, replacing BNY Mellon, confirmed Paul V. Doane, executive director.
Mr. Doane said trustees of the $950 million plan decided in May to move to a smaller bank that is “not so much of a big plan sponsor” custodian, noting that U.S. Bank is “very energized to make this work.”
Along with the move to a new global custody system, Clearwater Analytics was hired to provide a new performance measurement system with customized reporting.
The addition of the outsourced reporting service permitted trustees to feel comfortable about not renewing the contract of the pension fund's general consultant, Callan Associates. Callan's five-year contract for a la carte services for the Minnesota fund expired at the end of June, Mr. Doane said.
Trustees will consider the consulting services the pension fund really needs at an educational retreat in August before deciding whether to seek a replacement for Callan.
“In the past, the board has relied on the consultant more for performance measurement and reporting and less so for manager searches. With Clearwater on board, the former role now is taken care of,” Mr. Doane said.
Separately, trustees hired Franklin Park as the pension fund's first dedicated private equity consultant to help it meet its 10% target allocation. Private equity commitments and investments total 1.5% of plan assets now. Mr. Doane said a private equity consultant was sought so the pension fund could make direct investments rather than through private equity funds of funds.
Separately, Mr. Doane said he is researching the possibility of moving a “significant portion” of the pension fund into strategic partnerships with investment managers and will propose such a move at the August board retreat.
“For a fund of our size, with limited staff, moving some of our assets to a manager who can invest dynamically across the breadth of asset classes would be very helpful. This is a critical function that we may be able to outsource very effectively,” Mr. Doane said, noting that while trustees are “skeptical,” he hopes thorough education will alleviate some of their concerns.