Ohio Bureau of Workers' Compensation Fires Asset Manager

July 13, 2005 (PLANSPONSOR.com) - The Bureau of Workers' Compensation (BWC) of Ohio is ending its relationship with Allegiant Asset Management Group due to investment losses in a mutual fund, according to a BestWire Services report.

BWC has asked the institutional asset-management business to liquidate holdings in the large cap growth domestic equity fund that lost a total of $71 million.   The news report said the bureau claims that about $60 million of the fund’s losses resulted from management decisions by Allegiant.

The BWC initially provided Allegiant with $250 million to manage in January of 2001, the report said.    The company wrote off losses of about $50 million in 2002 and about $20 million in 2003, according Tina Kielmeyer, the BWC’s interim administrator .   In April 2004, the BWC drew down its Allegiant account by $75 million, and in May 2005 it drew down the account by an additional $50 million, BestWire reports.

The report notes that as of May 31, the BWC has $1.17 billion in capital invested with 13 large cap value managers, with a market value of $1.25 billion.   Kielmeyer said in a statement, “It’s imperative to emphasize that these losses have no impact on the value of the state insurance fund today.”   The bureau’s State Insurance Fund is fully funded, with a value of about $14.3 billion, and is running a surplus, she said, according to BestWire.