COLUMBUS – The Ohio Bureau of Workers’ Compensation (BWC) Board of Directors recently moved to further diversify the State Insurance Fund (SIF) portfolio with approval to issue a Request for Proposal (RFP) for active management of mid-capitalization and small-capitalization U.S. equity mandates.
“Analyses conducted by our investment consultants show active investment management focusing on U.S. mid-cap and small-cap stocks can achieve significant above average long term returns,” said BWC Administrator/CEO Steve Buehrer. “The addition of active managers to this class supports our investment strategy of achieving higher returns while finding a proper balance between passive and active portfolio management.”
The board approved a revision to the Investment Policy Statement (IPS) in January allowing for the active management of a targeted 7%, or approximately $1.4 billion, of the SIF investment portfolio allocated towards both mid-cap and small-cap U.S. equity mandates. This targeted 7% SIF asset allocation was approved to be segmented into five concentrated separate active management mandates with targeted asset allocations as follows:
- 2.0% mid-cap value U.S. equity;
- 2.0% mid-cap growth U.S. equity;
- 1.5% mid-cap core U.S. equity;
- 0.75% small-cap value U.S. equity;
- 0.75% small-cap growth U.S. equity
The RFP is tentatively scheduled to be issued in mid-April with the deadline for RFP responses in mid-June. Selection of managers following review by an RFP evaluation committee is tentatively targeted for the end of the year or the beginning of 2013. Once available, the RFP will be posted here.
The SIF U.S. equity allocation of 20% of total invested assets (currently 100% passively managed) will be comprised of an allocation of a 7% mid-cap and small-cap U.S. equity active mandate, a 1% Manager of Manager (MoM) Minority and/or Women Owned equity active mandate and a 12% large cap U.S. equity passive mandate.
Source: Ohio BWC