This was confirmed to Variety by Retirement Fund Chairman Sixto K. Igisomar in a phone interview.
“The board will decide on the money managers in our next board meeting,” said Igisomar.
In an earlier interview, Fund Administrator Richard Villagomez said he expected the decision would be made soon.
“All the interviews are done but no selection has been made yet. It is up to the board but hopefully soon,” he told Variety.
He said the trustees would have to sit down and evaluate the prospective money managers by going through their notes and properly assessing and picking the best candidate.
Asked on the possible date for the board to decide on the money managers, he said, “It could probably be sooner.”
During the board meeting last Wednesday, Villagomez reported that the Fund’s current market portfolio stands at $325 million: $3.1 million, cash and equivalents; $185.96 million, domestic equity; $46.94 million, international equities; $49.95 million, domestic fixed and $38.99 million in other investments.
The trustees also discussed the performance of their investments handled by the current managers.
According to Villagomez’s report, Atalanta Sosnoff — core manager — slightly underperformed the benchmark for March while Stralem & Co. outperformed the benchmark by 85 basis points.
With Atalanta as the core manager, Villagomez said the more appropriate benchmark is Standard & Poor’s 500.
For Stralem, a large cap growth manager, their benchmark is Russell 1000 Growth Index for large cap US Equities.
Villagomez said there are two categories for Atalanta: S&P 5000 – broad market and Russell 1000 Index, the more specific.
He said on a year to date, Sosnoff is underperforming on both benchmarks.
Trustee Adelina Roberto said Atalanta had been doing good until lately when its performance versus the benchmark registered negative.
This led Igisomar to request that Atalanta Sosnoff’s file be pulled out for their reference in the meeting.
“All those value added with a negative number, of course, those are concerns, but we need to look at the long term also,” said Villagomez.
The trustees welcomed the good news of the Fund’s good investment returns. Villagomez reported that total return for the portfolio for the month of March was 0.77. “The benchmark for the total portfolio would be a return of .43. The portfolio outperformed its policy benchmark by 34 basis points. It was a good one.”
Villagomez acknowledged that the report provided by their investment consultant Wilshire Consulting was a “good one” as it provided a breakdown per manager, per strategy, and per asset class.
Meanwhile, the Fund has yet to recover about $3 million from its former money manager JP Morgan which it had to let go late last year.
The Fund administrator reported that JP Morgan is still liquidating.
He said, “The original account was $20 million. It went up and down. Now, we have $3 million. The account is in the custody of the Bank of New York.”
He told the trustees that whenever money comes in, it goes to the clearing account. “When that cash is available, we do factor that into the drawdown.”
He also said it’s a hedge fund that is liquidating. “As the money comes in we use that part of our drawdown,” he said.
In an interview with Variety, Chairman Igisomar explained, “We had an account with JP Morgan, one of our money managers. Late last year, we removed the money manager due to some performance issues. As a result of removing the money manager, the funds they were holding need to go somewhere. And we have been liquidating the fund.”
He said JP Morgan has the stocks and they are selling out — cashing out.
He told Variety that the JP Morgan was managing $20 million in stocks at the time when the overall portfolio of the Fund was ranging between $280 million to $290 million.
“Right now it is in transition. We withdrew some of the money that was available. It is releasing the money as they become available.”
Workers Compensation Fund
The workers compensation account is now valued at $809,000.
Igisomar said,” It was around $538,000 when it started.”
The trustees agreed in the board meeting that they will tackle this when they meet on Rota in May to decide on how to handle this account.
MNI Lending Securities
The Fund is mulling to pull out from the Securities Lending program.
During the meeting, the trustees expressed the board wasn’t happy with this part of the program due to unrealized lawsuits and the declining value of the collateral pool that’s related to the Lehman’s crash.
It was reported that there were $6 million in unrealized losses and it is now down to $1.5 million largely due to the loss in value in the Lehman bonds held in the collateral pool.
It was recommended that this be referred to Wilshire Consulting.
Villagomez said the Fund can pull out now; however, Igisomar asked if there were penalties if the Fund were to pull out and ask Wilshire to review.
Villagomez reported that Wilshire knew about the program; however, it is not aware of the specifics.
Initially, Villagomez said the comment was — as far as the Lehman bonds — to consider this as not recoverable.
In an interview, Igisomar explained to Variety, “It’s an investment that the Fund participated in called MNI Lending Securities or cash pool collateral.”
He said the concept was they are using the cash pool of what they have “market value wise” and combined with other investors.
The trustees decided to pull out of the investment quite a while back, he said. The trustees were evaluating the performance and wondering whether they should continue. “If we are to pull out, what are the unrealized losses that might affect the Fund,” Igisomar said.
Pension software
The Fund is expecting a report from R&R Associates regarding the pension system software.
Villagomez reported to the board, “We met with R&R Associates regarding our next plan of action and we have gone through the scope of the next leg of this project. We are moving forward with that. We expect a report from them in a couple of weeks.”
Trustee Roberto said it has 10 days after [issuance of] notice to proceed.
The Fund is expecting “a comprehensive analysis of where we are at, where we should be, where should we go,” said Villagomez.
In a previous meeting, the board requested R&R Associates to provide a detailed analysis and time frame to fix the pension system software’s problems.
The board will base its decision on the report whether it would scrap or retain the system that was supposed to be completed in 2008 and which was reported to have been paid 90 percent of the full amount.
