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

Married retirees could be in for an $18,100 Social Security cut by 2032, CRFB says
Married retirees could be in for an $18,100 Social Security cut by 2032, CRFB says

A new analysis finds long-running fiscal woes coupled with impacts from the One Big Beautiful Bill Act stand to erode the major pillar for retirement income planning.

SEC bars New Jersey advisor after $9.9M fraud against Gold Star families
SEC bars New Jersey advisor after $9.9M fraud against Gold Star families

Caz Craffy, whom the Department of Justice hit with a 12-year prison term last year for defrauding grieving military families, has been officially exiled from the securities agency.

Navigating the great wealth transfer: Are advisors ready for both waves?
Navigating the great wealth transfer: Are advisors ready for both waves?

After years or decades spent building deep relationships with clients, experienced advisors' attention and intention must turn toward their spouses, children, and future generations.

UBS Financial loses another investor lawsuit involving Tesla stock
UBS Financial loses another investor lawsuit involving Tesla stock

The customer’s UBS financial advisor allegedly mishandled an options strategy called a collar, according to the client’s attorney.

Trump's one big beautiful bill reshapes charitable giving for donors and advisors
Trump's one big beautiful bill reshapes charitable giving for donors and advisors

An expansion to a 2017 TCJA provision, a permanent increase to the standard deduction, and additional incentives for non-itemizers add new twists to the donate-or-wait decision.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.