Fund terminates remaining money managers

The NMI Retirement Fund is now operating without any money manager pending the hiring of a new investment consultant, according to board of trustees chair Sixto Igisomar.

The agency used to have nine managers handling its assets invested in common stocks, fixed income, hedge funds, and money market. Since the passage of the Beneficiaries Derivative Act in September, some money managers resigned while the Fund terminated the contract of the rest.

Without an investment consultant, Igisomar said the Fund’s board cannot make decisions about what to do with its investments.

Until a replacement for Wilshire Associates is hired, Igisomar said the board will stick with its decision to liquidate all investments and move them to CDARS, or certificate of deposit account registry service.

This liquidation of assets is in accordance with a new investment strategy that the board had adopted, called Glidepath 2013, which the Fund describes as a conservative transitional portfolio.

Wilshire was hired in October 2010 but it terminated its contract in September, citing the negative impact of the derivative law. That law allows beneficiaries of the government pension program to take legal action on behalf of the Fund when trustees who manage them refuse to bring such action.

According to Igisomar, the Fund’s portfolio as of last week was at $263 million; nearly $40 million has already been transferred to CDARs. The rest of the assets, he said, are invested in mutual funds, while a portion is in a cash account.

The Fund, he said, is currently engaged with two mutual fund companies: PIMCO (Pacific Investment Management Company) and Vanguard.

In an early interview with Fund administrator Richard Villagomez, he said the ad for a new investment consultant generated four applications.

Based on their initial communication with Villagomez, Igisomar said the applicants do not seem “favorable” for the Fund. He expressed willingness to re-announce the position if no qualified candidate is identified.

The Fund management has yet to complete its review of all applications.

Besides the investment consultant post, the Fund is also finding it difficult to look for an auditor and attorneys due to the impact of the beneficiaries derivative law. The Fund has already informed the Office of the Public Auditor that it may possibly not complete its annual audit report due to the lack of an independent auditor.

For the attorney post, the Fund may re-announce the position a third time after getting only one applicant in previous announcements.