Category / Institutional Investors

by dietrichknauth

LACERS scraps PE consultant search, accuses incumbent of fudging numbers

The $15.7bn Los Angeles City Employees Retirement System (LACERS) scrapped an ongoing search for a private equity consultant, with a member of the board expressing no confidence in the incumbent consultant and accusing the firm of inflating its recent performance numbers.

The LACERS board intended to choose between incumbent Portfolio Advisors over TorreyCove Capital Partners in its search for a private equity consultant after a final review of performance information from both firms. But instead of choosing a new consultant, the board canceled its RFP and decided to begin anew after board members expressed a lack of confidence in either finalist or the RFP process.

CIO Rodney June was prepared to recommend Portfolio Advisors based on “stronger relative performance” for the years 2005 to 2013, according to the meeting agenda. But board member Nilza Serrano expressed no confidence in Portfolio’s numbers, saying that the firm had misled the board by excluding a major client, the Pennsylvania Public Schools Employees Retirement System, from its performance results.

Full story: LACERS scraps PE consultant search, accuses incumbent of fudging numbers

Published by Money Management Report

by dietrichknauth

NYC retirement system reports growth, but warns that good times may not last

The $175bn New York City Retirement Systems reported higher-than expected growth in the beginning of 2017, but its CIO warned against complacency, saying that some of the factors driving that growth are not sustainable in the long run.

The funds’ fiscal year performance to date was in the nine to 11% range, well above the city’s assumed 7% rate of return, CIO Scott Evans said at the funds’ quarterly public meeting. But with much of the growth driven by “ebullient” markets, the funds remain in a “dicey situation, fraught with risk,” he said.

“This is not normal – rates are low, valuations are extremely high, and volatility is extremely low,” Evans said. “This is as good as it gets, so we should not be complacent. We should be sure to rebalance frequently to keep our portfolio taut, because we’re going to get hit by a wave sooner or later. We can’t predict when it will come.”

The systems are concerned about the level of quantitative easing, which has been high ever since the 2008 financial crisis, mixed market signals stemming from low Treasury yields and high stock prices, and uncertainty around the possibility that President Donald Trump will appoint a new U.S. Federal Reserve chair with different policies than current chair Janet Yellen.

Read the full story: NYC retirement system reports growth, but warns that good times may not last

Published by Money Management Report/Pageant Media.