Florida Prepaid College Board, Tallahassee, is searching for an active domestic core fixed-income manager to run up to $1 billion for the $15.6 billion Stanley G. Tate Florida Prepaid College Program and about $220 million for the $571 million Florida 529 Savings Plan, said Bert Wilkerson, director of finance, accounting and risk management.
The board has issued an invitation to negotiate for a domestic core fixed-income manager to outperform the Bloomberg Barclays U.S. Aggregate Bond index.
The selected manager could potentially run up to $1 billion in the reserve portfolio of the prepaid college program. The reserve portfolio has a target range of zero to 15% of the program's investment portfolio.
Currently, all the fixed-income assets in the prepaid college program are in the liability-driven investment portion of the program's portfolio. The investment strategy of the prepaid program is only to meet the actuarially determined liability projections, and LDI fixed-income strategies make up 85% to 100% of the program's total assets.
The chosen manager would also manage about $220 million as an investment option in the 529 Savings Plan. Columbia Threadneedle Investments currently manages all fixed-income assets referenced in the ITN and is invited to rebid.
Separately, the board will make a hiring decision later this month on an ITN issued in December 2017 for the prepaid college program in the LDI fixed-income portion of the program's portfolio. That ITN was issued because Columbia Threadneedle Investments' LDI team had left the firm. Columbia Threadneedle rebid. Columbia Threadneedle, Standish Mellon Asset Management Co., Neuberger Berman and Northern Trust Asset Management each manage between $2 billion and $2.5 billion for the prepaid program, Mr. Wilkerson said. The board will also decide whether the manager in the new ITN will run a different fixed-income strategy in the reserve portion of the prepaid college program's portfolio.
The new ITN is available on the state of Florida's procurement website. Proposals are due at noon EDT on June 22. A selection is expected before October.