OCERS Latest Pension Fund To Trim Active Investment Managers

Apr 5 2017 | 7:32pm ET

The Orange County Employees Retirement System, or OCERS, has joined the ranks of public pension funds trimming back on allocations to active investment managers. 

The $14.1 billion pension plan reportedly decided in late March to redeem capital from funds managed by Franklin Templeton Investments, JPMorgan Chase & Co, PIMCO, Grantham Mayo Van Otterloo and Standard Life, in favor of lower-cost passive index-tracking investments, according to Reuters citing an article in FundFire. Assets being moved total more than $1 billion, the article said. 

The decision is reportedly based at least partly on recommendations by investment consultant Meketa Investment Group, which outlined millions of dollars in savings that could be obtained by moving some of the fund’s capital to passive investments and avoiding the “historical underperformance” of some managers. 

OCERS’ decision should not come as a surprise to the alternative investment community, as it has contemplated reducing its hedge fund allocations since at least mid-2016. In conjunction with Meketa, the pension manager undertook an asset allocation study in the third quarter of last year and eliminated its 14% allocation to absolute return strategies in January.

Some hedge funds made it through OCER’s cut, including funds managed by PIMCO, D. E. Shaw and Bridgewater Associates, the article added.


In Depth

PAAMCO: Will Inflation Deflate the Asset Bubble?

Jan 30 2018 | 9:49pm ET

As the U.S. shifts from monetary stimulus to fiscal stimulus, market pricing should...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Boost Hedge Fund Marketing ROI By Raising Your ROO

Feb 14 2018 | 9:57pm ET

Tasked with delivering returns on client capital, a common dilemma for many alternative...

 

FINalternatives Trending

From the current issue of