By Muskan Arora
Moving away from a single manager approach, the $2.8B Jacksonville Police and Fire Pension Fund has hired both J.P. Morgan and Sawgrass as its U.S. large-cap growth equity managers for downside protection.
At a recent board meeting, consultant RVK presented the board with Loomis Sayles or JP Morgan for a single-manager approach as well as a the option to take a “blended” approach that splits 75% of the growth equity portfolio to JP Morgan and 25% with Sawgrass. This would mean moving all Loomis Sayles’ assets ($146M) and half of Sawgrass’ assets to J.P. Morgan, according to the meeting materials.
In the long run, active large-cap growth managers have failed to outperform the index, which has pushed the pension plan to consider a blend of active and passive approaches.
Moving against the wind, trustee Chris Brown opposed re-hiring Sawgrass due to its underperformance over the past decade and showed support for hiring J.P. Morgan as a single manager.
He added that “one doesn’t hire a manager to be conservative during periods of growth.”
However, trustee Thomas Donahoo pointed out Sawgrass was the only manager that didn’t underperform in 2022. Additionally, he highlighted that Sawgrass’ “local representation and perceived defense capabilities” would complement JP Morgan’s approach.
While all the trustees and RVK supported a blend of active and passive with Sawgrass, trustee Brown opposed. The pension plan will dive deeper into this at its August/September asset-liability study meeting.
Other large-cap growth funds on the roster include Eagle Capital Large Cap Value. Earlier this year, the pension plan allocated $150M to Waycross Partners, a large-cap core equity fund. Interviews for large-cap growth managers were conducted in March.
The pension plan reported a trailing one-year return of 10.5%. U.S. equity makes up $1B of the total fund.
