Pensacola fire pension board approves switch to Wedge CapitalQVM product, chooses 40-bp CIT

The Pensacola Firefighters Relief and Pension Fund board voted unanimously to remain with Wedge Capital and move the plan into Wedge's Quantitative Value Momentum (QVM) product, implementing the strategy through a commingled investment trust (CIT) that carries a 40‑basis‑point fee.

The action, moved by a board member and seconded, followed a presentation by Richard Wells of Wedge Capital and a technical walkthrough by Andrei Bolshukov, the firm's partner who runs the quantitative strategy group. Wells told trustees the firm manages just under $8 billion firmwide and provided a packet tailored to the Pensacola fund.

Trustees said they had completed due diligence and discussed implementation options at length. "We could do a separate account or a CIT," Wells said; he noted the CIT option is daily valued and quoted a 40‑basis‑point fee. The board's consultant highlighted a 10‑basis‑point difference versus the SMA alternative shown in the materials.

Bolshukov described QVM as a multifactor, sector‑specific model that ranks the 1,000 largest U.S. companies, applies value and momentum metrics within eight sector "squares," then layers human oversight to catch data errors and large binary risks such as litigation or major M&A. "The secret is simultaneous cheapness and momentum," he said, explaining the process is designed to avoid so‑called value traps and to capture upside when momentum appears.

Board members asked how the strategy quantifies sell‑side "excitement" and how sector weights are determined. Bolshukov said sell‑side changes are captured in external research databases when analysts update earnings expectations; sector weights are based on market capitalization within the 1,000‑company universe rather than a value benchmark. The board also reviewed comparative manager screens prepared by its consultant showing Wedge's QVM product ranks competitively versus other large‑cap value options.

After discussion, a trustee moved to stay with Wedge but switch to the QVM (ArchCap) product using the CIT; another trustee seconded. The chair called the question and the motion passed with no recorded opposition. The board directed staff to work with counsel and the consultant on the documentation and implementation logistics for the CIT.

The board's decision follows a period in which the plan's legacy large‑cap product underperformed; the consultant said Wedge discontinued the older product and presented QVM as a successor. Wedge representatives said a new account will be opened rather than adding the QVM sleeve to the existing account, and that the transition can be completed before quarter-end if the board proceeds.

Next steps include finalizing paperwork and having staff and counsel review any CIT documentation and side letters before assets transfer.