Temple will hire the Seattle-based Pugh Capital Management to manage its fixed-income Operating and Auxiliary Reserves fund, the investments committee of the Board of Trustees announced in a meeting Wednesday morning.
Pugh, which has $2.8 billion in assets, also manages the investment portfolio for corporations and the University of Washington.
Kaiser told the trustees that his office, with help from Temple’s financial advisors Cambridge Financial Associates, considered five firms and interviewed three before recommending Pugh.
The university will notify Pugh this week and ask for a final fee negotiation, which Kaiser said was currently 26.7 basis points, or 0.267 percent of the managed assets. Investments committee chair and local investment banker Christopher McNichol said that he would like to see the fee reduced, and noted that the committee only approved the selection of Pugh, not the fee.
The OAR fund exists to manage university debts through the use of fixed income sources, Kaiser said. Since the income is fixed, no risk is involved. “You just need to align your investments with your liabilities,” he explained. Though his office could manage the fund, it was more efficient to leave it to Pugh.
The Investments committee recommended that the OAR Fund, founded in 1984 as the Retirement of Indebtedness Fund, be renamed in a meeting March 26, a resolution waiting for approval at the May 13 general body meeting. The general body rarely rejects committee recommendations.
The trustees’ audit committee met at 2 p.m. in executive session and lasted about an hour, Kaiser said.
The next trustees meeting is the facilities committee on May 5 at 12 p.m., a newly rescheduled date from the originally scheduled April 30 meeting.
Joe Brandt can be reached at email@example.com or on Twitter @JBrandt_TU.