Fund names new money managers

The NMI Retirement Fund has made a final selection of new money managers during a special meeting Friday on Capital Hill.

The board chose BNY Mellon of San Francisco, California—a merger of Bank of New York and Mellon Capital—as a passive/index manager for the following index fund allocations: U.S. equities, Russell 1000 Index; non-U.S. equities, MSCI ACWI (excluding U.S.) index; and for the short-term bond index.

Franklin International Small Cap, which manages $587 million of assets in a product line the Fund wants to invest in, was selected to manage its non-U.S. equities-small cap allocation.

The Fund selected Cohen & Steers Capital Management to manage its global real estate securities. The Fund’s benchmark for this allocation is approximately 40 percent U.S. property companies, 40 percent Asian property companies, and 20 percent European property companies.

PIMCO, or Pacific Investment Management Co., founded in Newport Beach, Calif., and later acquired by a German-headquartered global financial services company, Allianz, was selected to manage U.S. intermediate bonds-core plus and multi-asset inflation hedge. The multi-asset inflation hedge assets include such things as commodities futures/swaps, inflation linked bonds, stocks of natural resources companies, and resource-related new technology such as renewable energy companies. PIMCO’s commodity real return fund currently has about $21 billion of assets under management.

Pictet Asset Management, Ltd. was chosen to manage the Fund’s investments in emerging markets debt/local currency. The Fund seeks to participate in the more healthy debt market to capture possible future currency appreciation of emerging markets currency. Pictet’s parent company is a Swiss wealth manager, founded in 1805, and handles assets worth $11 billion.

For its equity long/short fund, the board chose to spread out the risk among three money managers: Aetos Capital; Blackstone Alternative Asset Management, the largest hedge fund manager with $1.4 billion of assets; and Lighthouse Investment Partners, a subsidiary of HFA Holdings, an Australian financial services company, publicly traded in Australia.

These new money managers will implement the “moderate-alternative” strategy recommended by Wilshire and Associates, the Fund’s investment consultant, for the Fund’s new asset allocation model.

According to the Fund, the revised asset allocation model tilts the overall investment strategy toward the preservation of capital rather than growth of assets.