US pension fund places FX Concepts on watch amid performance and personnel concerns
The $12.5 billion Ohio Police and Fire Pension Fund (OP&F) has put currency manager FX Concepts on watch “due to performance issues and concerns about personnel”, according to Money Management Letter, a sister-publication of EuromoneyFXNews.
FX Concepts, the second currency manager put on watch by OP&F this month, manages $62.3 million of the pension fund’s currency portfolio and will be subject to more stringent performance monitoring. The decision was made at the fund’s board meeting on April 25. Earlier this month, OP&F also placed Mellon Capital on watch, because of “unsatisfactory performance” of its $191 million active currency mandate, according to fund spokesman David Graham. Mellon delivered annualized returns of 2.4% during the past three years, below its 4% target for average annualized returns.
OP&F says placing a fund manager on watch involves thorough quarterly performance reviews, before a decision is made whether to terminate a contract.
The pension fund’s near-term asset allocation targets are around 30.9% in US equity, 21.7% in non-US equity, 6.5% in core fixed income, 2.5% in long duration bonds, 6.5% in global inflation protected securities, 15% in high-yield bonds, 10% in real estate, 4% in private markets, 1% in timber and 2% in commodities, according to fund documents.
The fund is in the process of transitioning those allocation targets to new long-term policy benchmark.
The long-term policy benchmarks are 21.7% in US equity, 21.7% in non-US equity, 23.7% in long-duration bonds, 12.9% in protected securities, 15% in high-yield bonds, 12% in real estate, 7% in private markets, 3% in timber and 3% in commodities, documents indicate.