University of Maine System's investment committee recommended hiring Newton Capital Management to manage a total of $23 million in global asset allocation portfolios for the university's $259 million managed investment pool of six endowments and $33 million defined benefit plan, said Tracy Elliott, director of finance and controller of the Bangor-based university.
Newton will manage $18 million for the endowments and $5 million for the DB plan. The hire, recommended by the university's investment committee at its meeting on May 26, comes as a result of an invitation-only search that resulted from the university's board choosing not to approve an earlier recommendation in February.
At its Feb. 23 meeting, the committee had approved decreasing its target to GAA in the managed investment pool to 20% from 25% to fund the creation of a 3% target to Treasury inflation-protected securities and increase the targets to large-cap equities to 16% from 15% and small-/midcap equities to 6% from 5%.
The committee as a result recommended terminating the PIMCO All Asset Fund, managed by Pacific Investment Management Co., from its $22 million portfolio as part of that decrease, and allocating 10% each to current managers Grantham, Mayo, Van Otterloo and Wellington Management. Each manager's portfolio would increase to $26 million from $22 million.
University trustees at their March 13-14 meeting approved the PIMCO termination but board members “were not comfortable with allocating assets to GMO without looking at the available options,” a Thursday meeting agenda item summary said.
Investment consultant NEPC conducted the invitation-only search, with Mellon Capital Management as the other finalist, and the investment committee recommended allocating one-third of the MIP's 20% GAA allocation each to GMO, Newton and Wellington as a result.
The investment committee also recommended Newton run the DB plan's entire 12.5% allocation to GAA, or about $5 million, replacing PIMCO.
Specific reasons for terminating PIMCO were not provided. The university's $231 million operating fund still retains the PIMCO All Asset Fund, which accounts for about $18 million of that fund's assets.