Massachusetts pension board fires five managers

The Massachusetts pension board fired five managers, including Legg Mason Capital Management.
AUG 07, 2008
The Massachusetts Pension Reserves Investment Management Board fired five managers , including Legg Mason Capital Management, a subsidiary of Legg Mason Inc. of Baltimore, for inconsistent performances and high-tracking errors. Others fired were Gardner Lewis Asset Management Inc of Chadds Ford, Pa.; NWQ Investment Management Co. LLC of Los Angeles; Mazama Capital Management Inc. of Portland, Ore.; and Ariel Investments LLC of Milwaukee. The PRIM fund began the calendar year with $53.7 billion. But, as of June 30, it had $50.6 billion in assets under management. The board ousted the five managers following a report from staff and Cliffwater LLC, a consultant based in Marina del Rey, Calif., which noted that for the past five years the actively-managed portfolio managers have not exceeded their respective benchmarks. As of May 31, PRIM had returns of -4.27% year to date, -9.17% for one-year trailing, 7.31% for three-year, 10.36% for five-year and 5.30% for 10-year. These returns compared to the benchmark of -3.07% for the year to date, -6.35% for one-year, 8.31% for three-year, 10.88% for five-year, and 4.82% for 10-year. The terminated managers had total assets of $2 billion as of June 30.The assets of these managers will be transferred to the Russell 3000 Index portfolio managed by State Street Global Advisors of Boston and also be used to fund the 1% allocation to a new portable alpha fund of hedge fund managers. The remaining active managers are INTECH of Palm Beach Gardens, Fla.; Pimco Funds of Newport Beach, Calif.; Axa Rosenberg Investment Management LLC of Orinda, Calif.; Earnest Partners LLC of Atlanta; Putnam Investments of Boston and Numeric Investors LP of Boston.

Latest News

Mercer Advisors lands third-biggest deal to date with Full Sail Capital
Mercer Advisors lands third-biggest deal to date with Full Sail Capital

With over 600 clients, the $71 billion RIA acquirer's latest partner marks its second transaction in Oklahoma.

Fintech bytes: FP Alpha rolls out estate insights feature
Fintech bytes: FP Alpha rolls out estate insights feature

Also, wealth.com enters Commonwealth's tech stack, while Tifin@work deepens an expanded partnership.

Morgan Stanley, Atria job cut details emerge
Morgan Stanley, Atria job cut details emerge

Back office workers and support staff are particularly vulnerable when big broker-dealers lay off staff.

Envestnet taps Atria alum Sean Meighan to sharpen RIA focus
Envestnet taps Atria alum Sean Meighan to sharpen RIA focus

The fintech giant is doubling down on its strategy to reach independent advisors through a newly created leadership role.

LPL, Evercore welcome West Coast breakaways
LPL, Evercore welcome West Coast breakaways

The two firms are strengthening their presence in California with advisor teams from RBC and Silicon Valley Bank.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave

SPONSORED The evolution of private credit

From direct lending to asset-based finance to commercial real estate debt.