Massachusetts Pension Reserves Investment Management Board, Boston, will consider hiring FIS Group to run $100 million in active international equities as part of the board's emerging manager-of-managers program, and Clifton Group to manage a cash overlay strategy, confirmed Eric Convey, spokesman for the $53.2 billion MassPRIM.
The hiring recommendations were made at a Tuesday meeting of the board's investment committee. The full board will vote on the recommendations at its Aug. 8 meeting.
Funding for the FIS hiring would come from reducing Marathon Asset Management's similar-style portfolio to $2.5 billion. The recommendation is contingent on investment staff at MassPRIM looking into recent organizational changes at FIS.
The committee also recommended standby managers Attucks Asset Management and Bivium Capital Partners for domestic small-cap equity and Progress Investment Management for core fixed income. The three firms will be on what the committee referred to as an emerging manager-of-managers “bench” and the board will have discretion to allocate money to them “as appropriate,” according to the meeting agenda. The firms on standby will not receive a management fee from MassPRIM.
An RFP for emerging managers of managers — those with less than $2 billion in assets under management — across all the board's asset classes was issued on April 30. The board has $9.9 billion in international equity, or 18.8% of total assets.
The cash overlay RFP was issued March 3.
Separately, the Massachusetts Pension Reserves Investment Trust, which the board oversees, returned 12.7%, 183 basis points over its custom benchmark, for the 12 months ended June 30, the board's latest fiscal year, said Mr. Convey. Assets totaled a record $53.2 billion as of June 30, up 13.2% from 12 months earlier.
PRIM's global equity investments returned a combined 18.4% for the fiscal year. Among its suballocations, domestic equity returned 22.1%; developed markets, 19.6%; and emerging markets, 5.4%.
For its remaining asset classes, private equity returned 14.1%; real estate, 12.8%; hedge funds, 12.2%; value-added fixed income, 7.6%; timber and natural resources, a combined 7.0%; and core fixed income, -0.3%.
As of May 31, PRIM had 43% of total assets in global equity; 13% in core fixed income; 10% each value-added fixed income, hedge funds, private equity and real estate; and 4% timber/natural resources, according to PRIM's website.