The Arkansas Teacher Retirement System’s investments fell in value by $783 million to $18.9 billion in the quarter that ended Sept. 30, but have rebounded since then, according to the system’s investment consultant.
The teacher retirement system’s investments were valued at roughly $19.9 billion as of Tuesday, system Executive Director Clint Rhoden said.
The system’s fiscal years start July 1, and the value of the system’s investments have bounced back and forth widely along with the stock and bond investments markets. The system is the state government’s largest retirement system, with more than 100,000 working and retired members.
Amid volatility in investment markets, the system’s trustees on Monday voted to terminate two stock market investment managers managing a total of $1.2 billion for the system and one bond manager managing about $360 million for the system. The board shifted these funds for management by other investment managers, based on the recommendations of the system’s investment consultant, Aon Hewitt Investment Consulting.
The trustees voted to terminate New York-based D.E. Shaw, which managed $791 million for the system in the investment manager’s world alpha extension fund as of Sept. 30.
They voted to terminate Boston-based Grantham, Mayo, Van Otterloo & Co. LLC as well. That firm managed about $416 million for the system in a global all-country stock market allocation as of Sept. 30.
The trustees authorized the investment of about $800 million in the funds managed by the two terminated stock market investment managers. The funds will be invested with Boston-based Arrowstreet’s global equity alpha extension fund. They also authorized the use the remaining funds to ensure adequate stock market index fund investments and better balance active risk contribution.
The trustees voted to terminate bond manager Boston-based Putnam, too. The firm managed $363 million for the system in its absolute return fixed income fund as of Sept. 30. Those funds will be split between existing bond managers Boston-based Loomis Sayles and Indianapolis-based Reams.
Among other things, reallocating the assets between Loomis Sayles and Reams offers the portfolio higher-yielding prospects, the system's investment consultant said.