Friday, July 20, 2012 - 12:22pm
New report says Delaware state portfolios lag behind others
Updated Friday, July 20, 2012 - 3:29pm
An independent report says Delaware's state's investment portfolio lags behind other states in performance.
State Treasurer Chip Flowers released the Credit Suisse report Friday morning.
John Lloyd, managing director of Credit Suisse, presented the report in a teleconference with reporters.
"We feel that over the long term, the state treasury has performed roughly in line with the comparable benchmarks, but has slightly lagged other comparable state treasuries," he said.
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Credit Suisse says Delaware's portfolio ranked below the average and median in overall performance over the last five years.
Flowers says Credit Suisse will act as a quarterback, guiding the state's investment managers.
"Credit Suisse will be kind of saying, 'This is what the target portfolio is going to look like' and then, of course, the managers, they will have some flexibility within that, but at least we're operating on one game plan," Flowers said.
Click here to listen
One of the recommendations is to set up specific guidelines for the state's investment managers. Others are aimed at trying to achieve a higher level of return while reducing risk exposure. Some of the recommendations will have to be approved by Gov. Markell and the Cash Management Policy Board, which will review the report at its next meeting.
In a statement, Markell says the report makes some important recommendations, such as greater transparency around portfolio results.
But the report suggests some changes that carry more risk and need more careful review, such as providing the Treasury “greater flexibility” to make investments in certain mortgage obligations and increased investments in international and corporate debt.
These funds are needed to pay the State’s on-going operational expenses and we need to be very careful how we invest this money.
You can see the report at www.treasury.delaware.gov.
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