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

Merrill lands four advisor teams as May recruiting data shows firm's two-way churn
Merrill lands four advisor teams as May recruiting data shows firm's two-way churn

Merrill's latest hires span Colorado to Louisiana, even as industry-wide recruiting data suggests the firm is losing almost as many advisors as it gains.

Fund manager sues Kandeo, alleges $100 million FinSocial loss
Fund manager sues Kandeo, alleges $100 million FinSocial loss

The $36 million buy allegedly hid inflated books and a $50 million diversion.

Advisor gets $200,000 from Ameriprise in 'emotional distress' lawsuit
Advisor gets $200,000 from Ameriprise in 'emotional distress' lawsuit

“An award citing emotional distress is very unusual,” an industry executive said.

Workplace financial education linked to stronger financial habits, but participation remains low
Workplace financial education linked to stronger financial habits, but participation remains low

New EBRI research found workers who participated in employer financial education reported higher confidence, literacy and financial satisfaction.

The rise of the super advisor: How AI is redefining competitive advantage in wealth management
The rise of the super advisor: How AI is redefining competitive advantage in wealth management

Beyond operational excellence, the winning advisors of the future are the ones who can reach across multiple disciplines without discarding specialist skills.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income