Administration June 5, 2003

Ohio Pension Sacks Money Managers

May 6, 2003 (PLANSPONSOR.com) - The $50-billion Ohio Public Employees Retirement System (OPERS) has given the pink slip to two of its international stock managers, citing poor performance and organizational changes at the companies.

Reported by

Eric Hazard

Nicholas-Applegate, who in October announced plans to eliminate 15% of its staff and close its global technology fund, was terminated by PERS, bringing to an end the firm’s management of a $300-million portfolio of large international stocks and a $21-million fund of small international equities. The firm, a unit of Allianz AG, was placed on the Ohio pension’s “watch list” in October for poor performance, according to a report by Bloomberg News.

With the move, the money formerly under Nicholas-Appelgate’s control will be shifted to existing unspecified managers. The pension currently has 18 international equity managers.

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Driehaus’ termination shifted the $230 million in an international stock fund being managed by the firm to JPMorgan Fleming Asset Management. OPERS cited recent organization changes – earlier this year, Driehaus named three new managers to its International Growth fund to replace the fund’s founder – and poor performance as reasons for the dismissal.

Also announced by the pension fund was the hiring of Callan Associates as an investment consultant for the state’s new member-directed plan and combined plan. The new plan will enable employees to choose investments, similar to a 401(k) plan.