Tuesday, May 13, 2014

Emerging Manger Circus and the NYC Pension Funds

Three weeks ago Scott Stringer issued a press release saying that he was going to recommend that the NYC pensions funds dump another $1B into the emerging managers circus.

For the record in FY-2013 NYCERS had $818.25M invested in US equities run by emerging managers. NYCERS paid them $4.41M in FY-2013. That is 50 basis points (50 BP's).

During the same year NYCERS had $4.39B invested in a Russell 3000 index fund run by Blackrock. NYCERS paid them $161,565 in FY-2013. That is .4 basis points (.4 BP's).

The emerging managers had the following returns:

  1. one year: 22.63%
  2. three years: 18.34%
  3. five years : 6.84%

Blackrock had the following returns:

  1. one year: 21.37%
  2. three years: 18.58%
  3. five years : 7.24%

I don't think I have to say more except that the trustees in their infinite wisdom terminated Blackrock in FY-2014. You can't make this stuff up.