Home > News > Pensions > New Jersey Police, Fire Pension Seeks CIO, Plans to ‘Dramatically’ Expand Staff
Pensions

New Jersey Police, Fire Pension Seeks CIO, Plans to ‘Dramatically’ Expand Staff

The $31 billion pension fund has also issued an RFP for a custodial services provider.

By Michael Katz




The $31 billion Police and Firemen’s Retirement System of New Jersey is looking for a permanent CIO to lead the investment staff for the multiemployer defined benefit plan, which has more than 80,000 members at 579 different companies.

According to a job posting from executive search firm CBIZ EFL Associates, the CIO will be responsible for helping the pension fund’s board of trustees fulfill its fiduciary duties and manage its assets. In addition to leading the investment staff, the CIO will be expected to monitor investment performance, suggest asset allocation and investment policy adjustments, and ensure compliance with all board policies and applicable laws and regulations.

Working with the investment staff and general investment consultant, the CIO will be responsible for all investment reporting and external investment manager evaluation and selection. The CIO will also be required to work collaboratively with the New Jersey state treasurer and the director of the New Jersey Division of Investments.

The CIO “must be a strong investment strategist” and will be responsible for, along with the external investment consultants, providing recommendations to the executive director, the board of trustees and the board’s investment committee.

For more stories like this, sign up for the CIO Alert newsletter.

Some other responsibilities include:

  • Providing investment performance and other key metrics regularly to the executive director and board;
  • Developing and sharing recommended asset allocation and investment policy changes;
  • Ensuring accurate and prompt distribution of funds to selected external investment managers;
  • Leading, mentoring and managing the investment staff, finance staff and compliance staff; and
  • Effectively communicating the overall investment strategy to diverse audiences.

The pension fund’s asset allocation is 24% U.S. large-cap equity, 10% private equity, 9.5% non-U.S. developed index, 8% private debt, 7% U.S. Treasurys, 6% emerging markets equity, 6% global multi-sector fixed income, 5% U.S. corporate credit, 5% PFRS Mortgage, 4% U.S. small/mid cap equity, 4% real estate value add, 3% real estate core, 3% infrastructure, 2% cash, 2% non-U.S. developed small cap index and 1.5% emerging markets small cap equity.

Including the CIO and a deputy CIO, the posting stated the pension fund’s investment staff is expected to “increase dramatically” as it seeks to grow to approximately 36 members from the current 23.

The pension fund also issued a request for proposals for a custodial services provider, saying the fund is “seeking a cost-effective custodial bank to assist with safekeeping and accounting for the fund’s assets.” Other responsibilities include settling securities transactions, receiving dividends and interest, providing foreign exchange services, paying fund expenses, reporting failed trades, reporting cash transactions, monitoring corporate actions at portfolio companies and tracing loaned securities.

Proposals are due by September 18.

Related Stories:

Illinois Police Pension Seeks Active Manager for Small, Mid-Cap Stocks

AustralianSuper Adds 6 Senior Staff to London Office

LACERA Seeks to Fill Newly Created Deputy CIO Role

Tags: , , , , , , , , ,

Home > News > Regulation > SEC Tightens Fund Naming Rules
Regulation

SEC Tightens Fund Naming Rules

The new rule applies an 80% investment policy that extends far wider than just ESG funds.
By Paul Mulholland



The Securities and Exchange Commission finalized a new rule Wednesday which will require investment funds whose name suggests investments with “particular characteristics,” ranging from environmental, social and governance to artificial intelligence, to have at least 80% of their value in securities that correspond to that name.

Before the new rule, the only funds required to follow an 80% rule were those whose name evoked a “specific type of security,” such as ‘equity’ or ‘bonds,’ “and not a strategy,” such as ‘growth’ or ‘value,’ says Abigail Hemnes, a partner in K&L Gates’ asset management and investment funds practice. Index funds were likewise already subject to an 80% rule.

Fund names previously not subject to the names rule were subject only to the “general anti-fraud provisions of the federal securities laws,” Hemnes explains.

Besides names that evoke a strategy, any name that suggests the fund focuses on a particular geographic region, industry or goal must also follow an 80% policy, according to the SEC.

Want the latest institutional investment industry
news and insights? Sign up for CIO newsletters.

During Wednesday’s open hearing in which the rule was approved by a 4-1 vote, SEC Chairman Gary Gensler said that a fund name that includes “AI or big data” would need to have 80% of its value in securities that reasonably fit that description.

Growth vs. Value

Amanda Wagner, the senior special counsel for the SEC’s division of investment management, explained during the hearing that funds have flexibility to reasonably define the terms in their name. SEC Commissioner Hester Peirce asked Wagner if one fund classifies a security as “growth” and another fund classifies it as “value,” is one necessarily violating the names rule? Wagner answered, “Definitely not,” provided the security could plausibly fall into either category.

Peirce also asked Wagner if a fund calling itself a “green car” fund could legally invest in high-efficiency gas-fired vehicles and not electric vehicles. Wagner answered yes, because that was a reasonable interpretation of “green car,” as that phrase has no “universal definition.” The fund certainly could not call themselves an electric car fund, Wagner added, and the fund would still have to define what it meant by “green” in its prospectus and disclose which securities it was counting toward 80%.

Wagner also noted that funds with compound names can reach 80% by adding the items together. Hemnes says that this would apply to ESG labeled funds, because they could keep the label, as long as ESG values added up to 80%. The fund would still have to define each term and disclose the exact criteria used to select investments described by the terms, she notes.

ESG Considerations

The initial proposal would have made ESG integration funds all but impossible to name ‘ESG,’ because it would have banned funds that do not use ESG considerations as a primary factor from using the label in their name. The final rule rolls this back, according to Hemnes: “ESG integration funds can still use an ESG term in” their names.

Andrew Behar, the CEO of As You Sow, a non-profit that promotes corporate social responsibility, said in an emailed statement that, “Under the proposed rule, if funds considered ESG factors, but such ESG factors were not the principal purpose of the fund’s investment strategy, it would have been materially deceptive and misleading to use ESG or a similar term (such as sustainable, green, impact, etc.) in the name. This section was left out of the final rule.”

Behar says that many funds take advantage of the remaining 20% in their portfolio in ways that can be “misleading.” He specifically cited funds that use environmental goals in their names but include coal companies in their portfolio. Behar says the final rule is a step in the right direction but ultimately will not end misleading labeling, “as long as you are 80% of what you say you are.”

If a fund falls below the 80% threshold, it will have 90 days to come back into compliance. The proposal, published in May 2022, initially gave funds only 30 days.

Funds greater than $1 billion in value will have 24 months after the rule’s effective date to comply, and those smaller will have 30 months. The effective date is 60 days after the rule is entered into the Federal Register.

Tags: , , , , , ,

«