Weak Third Quarter Hits US Public Pensions

US pension funds experienced their first overall quarterly loss on investments since April-June 2012 in the three months to the end of September 2014, according to data from the US Census Bureau.

The data from 100 of the biggest public pensions in the US shows that revenue from investments fell $43 billion in the third quarter of 2014, following gains of more than $200 billion in the first half of the year. The third-quarter declines were in part due to falls in the FTSE 100 and EuroStoxx 50 indices during the period.

Despite the losses, total assets across the 100 funds rose by $105 billion in the first nine months of 2014 to $3.31 trillion. Over five years, total assets in US public pension funds have risen 39%, from $2.37 billion in September 2009.

Pensions increased their exposure to corporate and government fixed income securities by $84 billion during the same period, and added $38 billion to US equity investments. Overseas securities exposure was reduced by $37 billion.

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US Census Bureau Qly Survey

The George Washington (GW) University has selected Strategic Investment Group as its new outsourced-CIO (OCIO), CIO has learned.

The university’s spokesperson confirmed that the transition of the management of the $1.6 billion fund would begin immediately.

GW Treasurer Ann McCorvey and Assistant Treasurer David Green are to remain with the endowment to support audit management and help liaise with the OCIO.

“This decision follows an announcement GW made in March to take advantage of the broad expertise and experience that a large firm can offer and then conducted an extensive RFP [request for proposal] process to search for a new firm,” the spokesperson said.

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Prior to resorting to an OCIO, GW’s endowment had suffered from several management problems.

In October last year, the former director of operations and risk filed a lawsuit against the endowment claiming she had been fired after attempting to expose fraudulent financial reporting.

GW also lost two senior staff members in the last two years amid poor performance.

According to Strategic Investment Group’s website, the Virginia-based firm had $34.7 billion under management.