02-28-2000Agenda/Pension
2-28-00
016-1
ACTION AGENDA
Board of Trustees of the Employees' Pension Fund
February 28, 2000
1. Call to Order - 9:00 a.m.
2. Approval of Minutes: 2/14/00 - Approved as submitted.
3. Authorize transfer of portfolio from Hanson Investment Management Company to
313ridge Capital LLC and approve contract with 313ridge Capital LLC - Authorized.
Approved.
4. Other Business - None.
5. Adjourn - 9:16 a.m.
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Employee's Pension Plan
Trustee's
Agenda Cover Memorandum
Agenda Item # "+(-u 4e- e S 3
Meeting Date:
SUBJECT/RECOMMENDATION:
Authorize the transfer of the portfolio from Hanson Investment Management Company to 3Bridge
Capital LLC and approve a contract with 3Bridge Capital LLC,
IM and that the appropriate officials be authorized to execute same.
SUMMARY:
• On December 31, 1999 the Pension Plan had $91 million with Hanson Investment Management invested
in equities using a "growth at a reasonable price" style.
• On January 6th the investment professionals with Hanson Investment Management quit to create their own
firm 3 Bridges Capital LLC.
• The assets of Hanson have been taken over by Sirach Capital Management, which does not have the
investment style that the city utilized at Hanson. Sirach manages equities with "growth" style
• The Pension Plan currently has $48 million invested in a fixed income style with Sirach.
• 3 Bridges has offered to manage our portfolio the same way as they did at Hanson, which is growth at a
reasonable price. Their fee is .01 % for the first $3,000,000; .005% for the next$15,000,000; and .003%
for the remaining. This is the same as the fee paid to Hanson. As an incentive to induce us they have
offered to manage the money for the first thirty days for free.
• Callan Associates, our performance measurement company, has interviewed both firms and strongly
recommends that the portfolio managed by Hanson be transferred to 3 Bridges.
• Members of the investment committee have done site visits and also recommend that the portfiolo at
Hanson be transferred to 3 Bridges.
• We do not recommend leaving the portfolio with Sirach in that it would be equivalent to hiring a new
investment manager without doing the due process. Additionally, the Pension Plan already has two other
"growth" equity managers.
Reviewed by: Originating Department: Costs: Commission Action:
Legal Finance $320,000 ? Approved
Budget N/A Total ? Approved with Conditions
_
Purchasing NIA User Department: $240,000 ? Denied
Risk Mgmt. N/A Finance Current Fiscal Year ? Continued to:
is N/A Funding Source:
ACM ? Capital Improvement:
Other Advertised: ? Operating:
Date: ? Other: Pension earnings- Attachments:
Paper:
Submitted by: ? Not Required Appropriation Code
Affected Parties 646-07410-
F
.?iU 064.,V?
? Notified
530100-585
?
None
City Manager ? Not Required
0J Printed on recycled paper
• Upon Trustee approval of the transfer to 3 Bridges, staff will give Hanson the 30 days termination noticed
required by our contract.
• A copy of 3 Bridges contract is in the City Clerks office.