CHIMCO Opens for Business as Ascension Investment Management

(October 2, 2013) – The Catholic Healthcare Investment Management Company (CHIMCO), a $26 billion health care fund, has reinvented itself as an asset manager.

On October 1, CHIMCO officially became Ascension Investment Management, according to its parent organization. While the moniker signals a new direction for the fund, it has retained its investment staff, external managers, Catholic values, and internal holdings.

“The new name reflects the company's completed transition from managing primarily Ascension assets to becoming a registered investment advisor and managing assets on behalf of outside clients,” the organization explained.

CIO David Erickson told aiCIO that this change allows the fund to capitalize on one of its most valuable assets: its skills as an institutional investor.

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“Hospital revenues are dropping, and they’re looking for ways to diversify their income,” Erickson said. “We already had existing clients, and a number of organizations who wanted to join their assets in with us.”

Ascension aims to become the leading manager for asset owners that share its values for socially responsible investing, according to Erickson.

"Everything we invest in is done with our values in mind, and the clients we partner with have similar values to ours," he told aiCIO in late 2012. “We don't think those guidelines impair our returns, but they do require extra work—more due diligence and monitoring.”

CHIMCO’s leaders saw an opportunity with smaller, values-oriented assets owners who lack the capacity to take on that extra work—or at least do it efficiently. With the new branding, Ascension hopes it raise its profile in that space, according to Erickson.

“Obviously, our size helps us to access excellent managers and negotiate from a position of strength," he said.

Furthermore, Erickson noted that the team’s expertise in alternatives has been a particular draw. “For example,” he said, “we already have a non-Catholic client that’s invested just in our hedge funds portfolio.”

The St. Louis, Missouri-based fund won in the healthcare category at aiCIO’s 2012 innovation awards.

Related Content:Profile of David Erickson

(October 1, 2013) — Large private equity (PE) funds have continued to snowball, according to Preqin data, as investors continue to favor sizable and established managers.

The first nine months of 2013 saw 20% more PE capital raised than for the same period last year, but it was dispersed among fewer funds, the data showed. The total number of PE funds closing hit a six-year low in the July-through-August third quarter.

“Many investors are increasingly looking to place more capital with larger and more established managers,” Ignatius Fogarty, head of private equity products at Preqin, said. “With a record breaking number of private equity funds currently in the market competing for capital, the remainder of 2013 is set to continue to be highly competitive for fund managers.”

Still, the average size of shuttered PE funds was $532 million in the third quarter, down $164 million from the April-through-June period.

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In this latest three month stretch, 179 funds accumulated $87 billion—a figure that Preqin expects will rise by 10% to 20% as new information becomes available.

A total of 606 funds closed during first nine months of 2013, raising a total of $311 billion, according to the alternative asset data firm.

Of these funds, North American entities represented 66%, or $57 billion, of aggregate capital raised, the report stated. European funds secured $22 billion, while those based in Asia drew $4 billion.

Across all PE strategies, buyout funds secured the most capital—$28 billion—this quarter, the data showed.

CVC European Equity Partners VI was the largest fund to close, accounting for almost 63% of capital raised by European funds, with €10.5 billion secured in seven months. GSO Capital Solutions Fund II, an American distressed debt fund, came in second, with $5 billion.

Stiff fundraising competition is expected, the Preqin report said, with a record of 1990 PE funds in the market as of October 1, together aiming to raise $721 billion.