Vermont Pension Investment Committee, Montpelier, hired GAM USA to manage a $260 million unconstrained fixed-income portfolio for the $4 billion Vermont State Retirement Systems, said Stephen Rauh, chairman of the investment committee, in an e-mail.
GAM USA replaces Pacific Investment Management Co., the result of an invitation-only search to further examine and diversify the committee's fixed-income allocation following the departure of William H. Gross, PIMCO's co-founder and chief investment officer, on Sept. 26.
PIMCO was a finalist along with Loomis Sayles and still manages $240 million in its all asset strategy and $220 million in an active domestic core-plus fixed-income-strategy for the retirement system.
Separately, the committee terminated hedge funds-of-funds managers Permal Group and GAM USA, which ran $80 million and $40 million, respectively. Assets were moved to existing hedge fund-of-funds manager Grosvenor Capital Management, giving the manager a total of $200 million.
The changes are the result of a review of the committee's 5% allocation to hedge funds. The move to a single manager “will simplify administration and will result in a modest reduction in overall management fees, without any measurable impact on the expected risk or expected return of VPIC's hedge fund-of-funds allocation,” Mr. Rauh said.
Investment consultant NEPC assisted.