The $1.4 billion pension fund's investment consultant, Gavion, had recommended at the pension board's Sept. 16 meeting to hire a single emerging markets debt manager “that invests in both local currency and U.S. dollar-denominated debt,” the minutes said. PIMCO's portfolio is solely local-currency debt and TCW's portfolio is primarily U.S. dollar-denominated. The two managers run $64 millon total; individual portfolio sizes could not be learned.
The minutes said Gavion recommended the change because “it would be more efficient and cost effective to employ a single manager who could identify opportunities across the full (emerging markets debt) asset class and have the flexibility to invest in those opportunities.”
Gavion recommended hiring Logan Circle Partners to replace PIMCO and TCW, and allocating the pension fund's entire 6% target, or $79 million, to the new manager, with the remaining $15 million coming from other managers.
The board, however, voted solely to terminate PIMCO and TCW due to “apprehension about investments in emerging markets at this time,” the minutes said.
The $64 million was parked in an iShares exchange-traded fund, to be allocated as market conditions change, the minutes said. Further information was not provided.
Tamara Nolen, spokeswoman, was not available to provide further information by press time.