Idaho Endowment Investment Board, Boise, hired Dodge & Cox to manage $225 million in active domestic core fixed income for the state’s $3.3 billion endowment fund and $125 million in active domestic intermediate credit fixed income for the $1 billion state insurance fund, said Chris Anton, the investment board’s manager of investments.
Dodge & Cox replaces Western Asset Management Co., which was terminated from two similar portfolios.
“Our concern was that the Ken Leech investigation could result in the turnover of key staff and create distractions as firms transition assets,” Anton said.
Numerous asset owners have terminated Western Asset Management over the past several months after its parent, Franklin Templeton, disclosed in August that the SEC had issued a Wells notice to co-CIO Leech, identifying him as a target of an investigation focusing on “past trade allocations involving Treasury derivatives." Leech has since resigned and been charged by the agency with securities fraud.
As of Dec. 31, the endowment fund’s actual allocation to fixed income was 23.4%. Allocation information for the state insurance fund was not available.
