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Missouri LAGERS Reach 3.6% Return

Recently released figures for the Missouri Local Government Employees Retirement System (LAGERS) highlight that approximately 33,000-member fund hit a positive investment return during the “challenging” year of 2012.

“The investment markets for the one-year ending June 2012 were challenging once again, with a return of 3.6%,” said Arby Todd, chairperson of LAGERS Board of Trustees, in a brief annual report.

As of June 30, the Jefferson City, Mo,-based system return ranges reached about 45.2% in U.S. government long bonds and –16.6% return in emerging markets equities, CIO Brian Collett said in his comments.

When the annual period concluded, LAGERS reported about $4.6 billion in total assets; its asset allocation included a more than 50.9% commitment to stocks, 25.5% to fixed-income and 23.6% to alternatives, the report said.

“The fiscal year ending June 30, 2012 was spent trying to recover from the investment turmoil created in the third quarter of 2011,” Collett listed. “This turmoil was caused by the markets’ risk aversion to the Greece financial crisis and its fellow European counterparts that drove the equity markets down.

The system lead investment officer added the total portfolio gained 13.5% return for annual period’s last nine months; this was then pitted against losses from 2011’s third quarter.

“This modest gain for the year is due to the wide diversification for the returns within the different asset types in LAGERS’ portfolio,” Collett stated.

Conclusively, LAGERS stated it reported a 13.85% over the three-year period, 3.14% over five-years and 7.17% over its 10-year marker, the financial document said, while noting that the plan’s assumed rate of return was situated at 7.25%.

Past investment moves reported by IMMP can be traced back to December 2011 when the LAGERS Board decided to cut out INTECH Investment Management from its equity management account. The unanimous passing motion called to “sever LAGERS’ relationship with [the firm] as of January 4, 2012.”

The prior annual report listed INTECH Investment Management as one of the 13 managers within the plan’s $2.4 billion equity portfolio. Large-cap held about 19.3%, or $874.8 million, of its total $4.5 billion portfolio.

As of June 30, 2011, LAGERS had about 27.6% committed to fixed-income, roughly 24.4% to global equities, 19.3% to domestic stocks and 18.2% to alternative investments, its report stated.

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