The FPP Board of Trustees terminated the current investment in the hedge fund with BlackRock Inc. as of December 31, 2014. This fund was not meeting the performance expectations established for the fund. The existing Policy Mix for this hedge fund was a 3% allocation in the Balanced Fund and a 6% weighting in the Foreign Equity Fund.
It was also agreed by the FPP Board to move this hedge fund weighting allocation in both Funds to be evenly split amongst the two current Global Equity managers (i.e. MFS Investment Management and J.P. Morgan). This will increase the Policy Mix weighting in the Balanced Fund from 10.5% each to 12% each (i.e. 24% total) for these two managers. The investment expenses for the Balanced Fund are expected to increase only marginally by approximately 0.02% to 0.43% with this change in allocations.
In the Foreign Equity Fund the increase will be from 36.5% to 39.5% (i.e. 79% total) each for these two managers. The investment expenses for the Foreign Equity Fund are expected to increase only marginally by approximately 0.02% to 0.56% with this change in allocations.