Note to Cambridge Retirement Board: Good luck with that RFP…
Sep 20th, 2007 | Filed under: 130/30After all the hoopla about 130/30, it’s great to finally see a few RFPs being floated by various institutional investors. Here’s one appearing in the news today (hat-tip to Opalesque).
But before all you 130/30 providers send your pitch books to the Cambridge Retirement Board, check out some of the questions. Here are a few listed under the heading “Minimum Criteria“:
- The firm has at least 3 years of experience providing investment services in the “Proposed Product”.
Yes_____ No_____ - The firm has updated Evestment Alliance database for the products that are being submitted as of 9/30/07 (i.e. firm profile, product profile, investment strategy/philosophy and investment professionals).
Yes_____ No_____ - The performance of the “Proposed Product”/Composite has outperformed the S&P 500 over the three year trailing period ending 9/30/07.
Yes_____ No_____
As we discussed yesterday, the concept of 1X0/X0 only entered popular dialogue about 5 years ago. In fact, Gordon Johnson (of Wednesday’s posting) did an analysis of real 130/30 funds in the eVestment Alliance database and finds their numbers to be, shall we say, a little thin. Johnson found that 34 companies listed 1X0/X0 funds in the eVestment Alliance database as of June 30, 2007, and only 10 of them had a track record of three years or more.
Source: Lee Munder Capital Group / QWAFAFEW
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One of the reasons for the lack of strategies included in eVestment is that they had traditionally added new products to a universe after a year’s worth of performance had been captured. I pointed out that, while appropriate to wait a year for new products in established asset classes, it might be helpful for plan sponsors to see all of the new products in this asset class regardless of length of track record. Batterymarch’s 130/30 started 12/31/06, and has now been added to the universe. I believe eVest will loosen the 1 yr. requirement for 130/30 going forward.