PRIM reports gains and low average fees; Needham board hears investment update as assets rise to about $275 million

Representatives from the Pension Reserves Investment Management (PRIM) board presented an update to the Town of Needham Retirement Board on Oct. 15, reporting 12-month performance, the systems asset mix, fee structure and operational changes to account access. PRIM said the Needham allocation had about $275 million in assets in its most recent reporting and that the 12-month return was roughly 9.6% through the reporting period.

PRIM staff described the funds approach to managing costs and diversification. The presenters said that, when expressed as a single blended number for the portfolio, total management and investment-related fees ran in the low- to mid-50 basis point range (PRIM cited about 53 basis points as a typical multi-year average). PRIM staff explained that the composite fee is a weighted average of public and private market manager fees and other operating costs, and that quarter-to-quarter lumpiness can occur because of timing differences in private-asset fees and quarterly payments.

PRIM noted that it manages assets across a broad set of strategies (global equity, core fixed income, private equity, real estate, timberland and hedge funds) and that the fund prioritizes cost control and risk management. PRIM also highlighted that its private-equity program consistently ranks among the top public plans in national surveys and emphasized liquidity planning: the manager said the vehicle can meet typical cash requests and that recent inflows totaled several million dollars of new commitments into the program during the reporting period.

PRIMs speaker reviewed governance and transparency items. The manager said it is moving more account transaction work to a secure portal (reducing acceptance of checks) and encouraged retirement office staff to confirm authorized portal users. PRIM also summarized recognition the organization has received for financial reporting and compliance, and it cited a longer track record of performance since Needham joined PRIM in 1985(the presenter said Needhams since-inception return is about 8.7%).

Board members asked for clarifications about fees, bonus/compensation practices, and monthly vs. annual fee reporting. PRIM staff said bonuses and compensation are governed by the organizations compensation committee and undergo third-party benchmarking; PRIM emphasized that compensation decisions are made in public meetings and the pension plans pro rata share of costs is reflected in its reported management-fee figures.

PRIM ended with an offer to meet with the retirement-office administrator or trustees for more detailed walk-throughs of allocations or the private-asset portfolio. The board did not vote on investment strategy at this meeting; the PRIM presentation was informational.