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Trustees approve termination of Newton/Cowen U.S. equity mandate; assets to move to S&P 500 index
Summary
Board voted to terminate a U.S. direct equity strategy managed by Newton/Cowen and authorized transition of roughly $74 million to an S&P 500 index strategy; motion carried unanimously among voting trustees present.
The El Paso City pension board voted to terminate its U.S. direct equity mandate managed by Newton (Cowen/Newton) and to transfer those assets to an S&P 500 index strategy, a trustee motion and subsequent vote showed.
The motion, made by Mr. Pena and seconded by Representative Canales, authorized the plan to transition assets from Newton and Cowen and authorized the chairman or the executive director to execute the related documents. The motion carried; trustees recorded affirmative votes from Mr. Cruz, Mr. Grinchas, Mr. Pena and Representative Canales.
Why this matters: the investment committee and the consultant recommended the change after finding the strategy had become, in practice, nearly indistinguishable from a blended S&P 500 plus cash/treasury financing approach and because the strategy had fallen below investment-policy compliance thresholds on intermediate (3- and 5-year) metrics. The committee cited compliance with the board’s investment policy statement as a driver of the recommendation.
Board discussion and rationale
- Performance and compliance: Presentations showed the strategy’s since‑inception numbers remained positive but 3- and 5-year performance trailed benchmarks. The investment committee and Callan recommended terminating the mandate to improve alignment with the IPS.
- Transition mechanics and amount: Trustees asked about the size of the mandate. Representative Canales referenced roughly $74,000,000 invested (about 7.4% of the trust) and staff said assets would be transitioned to a passive S&P 500 strategy as soon as contract notice and transition logistics permit; BNY Mellon will receive the reallocated assets as custodian.
Vote and formal action
- Motion: "Authorize the transition of assets from Newton and Cowen as recommended by Cowen and authorize the chairman to execute or the executive director to sign the related documents." (motion text read into the record) - Mover: Mr. Pena (Trustee) - Seconder: Representative Canales (Trustee) - Vote: Cruz (Aye), Grinchas (Aye), Pena (Aye), Canales (Aye) - Outcome: approved. The board instructed staff to work with the managers and BNY Mellon on transfer logistics.
Ending
Staff and the investment committee will follow contract notice provisions and return with details on the timing and post‑transaction rebalancing recommended to restore alignment with the IPS.
