Fund Administrator Richard Villagomez reported to the board that they are anticipating an increase in drawdown from the market portfolio by the end of the current fiscal year.
“There is a high probability that we will withdraw more than what’s budgeted. It all depends on the actual cash that comes in.
If more cash comes in, of course we draw down less,” Villagomez said.
He said as of April 19, the cumulative drawdown was $29.7 million. He said the annualized drawdown may possibly reach $55 million if the Fund will not receive the expected employer’s contributions.
Villagomez said this is over the budgeted drawdown of $54.2 million.
“The projection is $800,000 over the budget,” he said.
According to the Fund’s operating budget, they still remain within the FY ’11 budget but they estimate a 15 percent reduction in revenue mainly due to the unremitted contributions from the government.
“In the third quarter we will request the board for adjustment to that amount [of the requested drawdown] in case we go over,” Villagomez said.
He told the board that the less money the Fund receives the more the Fund will have to draw down to meet the shortfall.
The Fund, Villagomez said, has been withdrawing heavily from the large cap equities based on the recommendation of Wilshire Consulting, its investment consultant.
As of March this year, the Fund withdrew $1.6 million from Renaissance and $1.5 million from Stralem and Co., said Villagomez.
The Fund was to make a decision during the board’s executive session — or closed-door meeting — yesterday regarding the fate of the money managers.
Retirement Fund Chairman Sixto K. Igisomar said the board would discuss the money allocations as well as the selection of the money managers.
He said the Fund had interviewed 18 applicants out of which nine will probably be selected to handle the agency’s investments.
Igisomar declined to offer any more details.
He said the board had already decided on what allocation to have and that was what they were supposed to discuss in executive session.
“The asset allocation that we are deciding to go for and the money managers we are going to hire, we will need to make sure they match,” he said.
Variety learned that some money managers’ contract may no longer be renewed as a result of the newly adopted money allocation. Igisomar said some managers may be let go not because of their performance but because the allocation called for a specific manager.
The Fund also reported a rosy outlook for its investments.
Villagomez said, “They are doing good. We had healthy returns,” he said.
He reported that as of March 31, the total investment value was $325 million.
