Board discusses creating low-fee allocation sleeve to speed manager allocations
Summary
Board members and ACG discussed an allocation-fund approach (a low-cost fund-of-funds or ETF sleeve) to avoid long contract delays; ACG will identify candidate allocation funds for further review, with a target fee ceiling around 35-40 basis points.
Several board members urged the consultant and staff to return with a short list of low-cost allocation vehicles or fund-of-funds to speed implementation of strategic allocations. Sharik (speaker 8) argued a passive allocation sleeve could be implemented cheaply and avoid months-long waiting periods for manager approvals and said, "We cannot. Period." when stressing the board's limited bandwidth to run active manager selection.
ACG said it would present candidate allocation funds (targeting lower fees such as 35-40 bps) and a mix of passive and active options for the board to consider. The board asked ACG to bring about 10 candidate names and to filter out high-fee (100+ bps) options unless a compelling outperformance case could be made.
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