Wyoming State Loan and Investment Board, Cheyenne, hired Epoch Investment Partners, Lazard Asset Management and RBC Global Asset Management (U.S.) as part of a restructuring of the state permanent funds’ $2.4 billion domestic equity portfolio, said Michael Walden-Newman, chief investment officer, in an e-mail.
Epoch and Lazard will each manage $264 million in active domestic all-cap equities, and RBC will manage $192 million in active domestic small-cap equities.
The state treasurer’s office issued an RFP in May following the decision earlier in the year to restructure the domestic equity portfolio “to deliver better risk-adjusted returns,” said a memo provided by Mr. Walden-Newman. The previous structure was an 85%/15% split between passive large-cap equities and active domestic smidcap value equities.
State Street Global Advisors, which had managed the $2.04 billion passive large-cap value equity portfolio, will now manage 70% of the domestic equity portfolio, or $1.68 billion, in “passive U.S., low volatility and fundamentally indexed equity,” according to the memo. The remaining 30% is invested with the new managers.
The board terminated GAMCO Investors from its $360 million active domestic smidcap value equity portfolio as a result of the restructuring earlier this year. Mr. Walden-Newman wrote that GAMCO “just didn't fit as well as RBC under the new structure. They (have) been a great manager for Wyoming for over a decade. I've recommended them before and will again to others.”
The board oversees the state’s $11 billion in permanent funds, including the $6 billion Permanent Mineral Trust Fund, $2.8 billion Common School Permanent Land Fund and five other funds. The board also oversees $5.5 billion in state operating funds, which by state law invest in only cash and fixed income.
Investment consultant RVK Inc. assisted.