Porter County Foundation terminates Wasatch fund, approves replacement and schedules 5% spending discussion

Porter County Foundation trustees voted to terminate the Wasatch Ultra Growth Institutional Fund and approved replacing that allocation with a small‑cap growth manager after a presentation by consultant Amanda Black of Capital City.

The action came after Capital City reported the foundation portfolio ended the quarter at about $186,800,000 with a 1.4% positive return for the quarter and recommended the Wasatch fund be removed due to sustained underperformance. Amanda Black, Capital City’s consultant, told trustees the Wasatch fund had been placed on watch status and that the consultant team “changed those lights to red,” and therefore recommended termination and replacement.

Capital City presented three finalists to replace the Wasatch allocation—William Blair, Congress and Stevens—and highlighted tradeoffs among them. Black described Stevens as an employee‑owned small‑cap growth specialist with a long, stable team and a roughly 90–104 stock portfolio that produced strong risk‑adjusted returns in the consultant’s screening. She said Congress (described in the presentation as a more concentrated portfolio of about 40 stocks) had stronger past performance but higher quarter‑to‑quarter volatility.

Trustees moved to terminate the Wasatch fund and carried that motion by roll call. After discussion about volatility and the foundation’s tolerance for risk, trustees then voted to place the Wasatch allocation into the Congress small‑cap growth option. Board members noted the small‑cap allocation is a relatively small component of the portfolio (the group referenced a roughly $5,000,000 allocation for that sleeve) and that the portfolio’s expected long‑term return (presented by Capital City at about 6.6%) should still support the foundation’s 3.25% spending policy.

Capital City also presented an analysis of a prior one‑time higher distribution. Black said the consultant ran scenario‑based projections using historical quarterly market values and the foundation’s asset allocation to show the effect of a one‑time larger distribution. She explained, “The only single thing that's different between the 2 lines is that 1 time, spend,” referring to starting the projection with $3,000,000 less because the board had made an extra distribution earlier in the year. That $8,900,000 annual distribution (a special 5% draw determined at the end of the year) had already been physically withdrawn from the investment account and moved to the county account, Black said.

Separately, a trustee moved to place a proposal on the next foundation meeting agenda to consider a one‑time 5% draw for the 2026 budget year (limited to a single year). Trustees voted to place that discussion on the upcoming agenda.

Votes at a glance: termination of Wasatch Ultra Growth Institutional Fund — motion carried (roll call); replacement of the Wasatch allocation with the Congress small‑cap growth fund — motion carried (roll call); motion to add consideration of a one‑time 5% draw for 2026 to the next meeting agenda — motion carried (voice vote). Approval of quarterly claims for Capital City (reported as about $16,250) was moved and carried during the same meeting.

Capital City recommended no change to the foundation’s overall strategic asset allocation. Black said expected long‑term asset class returns used in the consultant’s capital market assumptions were roughly 7.35% for broad U.S. equity, 4.75% for U.S. fixed income and about 2.5% for long‑term inflation; aggregating those assumptions produced a projected portfolio return around 6.6%, down from about 7.0 in the prior year’s estimate.

Trustees did not set a final implementation date in the meeting transcript; Capital City emphasized it does not have discretion to make manager changes without trustee approval and brought the recommendation for the trustees to vote. Trustees directed staff to effect the termination and the replacement that the board approved and scheduled the spending‑policy discussion for a future meeting.

The meeting also included routine items: Capital City’s quarterly performance review, the presentation of candidate replacement funds with a manager comparison grid, and the model outputs comparing the one‑time distribution scenarios. Amanda Black closed by offering to provide any additional materials trustees requested ahead of the next meeting.