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Advisor recommends exploring Newton commingled trust to cut fees; board asks staff and counsel to review
Summary
An investment advisor told the Sarasota City pension board that switching a Newton separately managed product into a BNY Mellon‑custodied commingled investment trust (CIT) sub‑advised by Newton could save roughly $40,000–$46,000 annually on about $60 million in assets; the board requested paperwork and legal review before any decision.
Larry (presenting for the board’s advisors) recommended the board consider moving a Newton separately managed account into a commingled investment trust (CIT) custodied by BNY Mellon and sub‑advised by Newton, saying the CIT charges an estimated 40 basis points and would reduce the current blended fees on the first $60 million of assets by roughly $40,000–$46,000 annually.
The advisor said the CIT’s holdings and portfolio management would be identical to the separately managed account and that Newton would permit an in‑kind transfer so the portfolio would not have to be taken out of the market during a conversion. He said he had verified that the CIT is daily‑priced and that performance appeared identical net of fees to the SMA product in recent comparisons.
Board members and staff discussed custodial differences: Anthony noted the board’s existing custodian relationship with Fifth Third and flagged that some current products are held outside Fifth Third; the advisor confirmed the CIT is custodied at BNY Mellon and said the board’s custodian could mirror reporting but that would add an extra custodian fee.
The board did not take a formal vote. Instead, members asked the advisor to provide documentation and paperwork and asked staff to have their attorney review any side‑letter or custody issues; the advisor said Newton (and rep Terry O’Toole) could present in the fall.
Chair and staff agreed there was a consensus to investigate and to return with legal and operational details before any decision.
