Asset growth enables firm to offer wider range of client services

In a move to broaden the financial solutions it provides to clients, PFM’s Multi-Asset Class Management (MACM) group is partnering with State Street Bank and Trust Company to introduce three sub-advised mutual funds: the PFM Multi-Manager Domestic Equity, PFM Multi-Manager International Equity and PFM Multi-Manager Fixed-Income funds.

“We’re excited to be able to offer these new solutions to our clients,” said PFM Managing Director Marc Ammaturo, who leads the MACM business along with PFM Managing Director John Spagnola. “Through aggregation of our clients’ assets, we are accessing professional investment managers in three distinct asset classes.”

PFM’s MACM team currently manages each client’s portfolio independently, and oversees institutional assets including endowments, foundations, hospitals, higher education organizations, Taft-Hartley funds, public pension, Other Post-Employment Benefit (OPEB) funds and insurance trusts. By pooling clients’ assets into these new mutual funds the MACM team will increase collective purchasing power.

“We have committed substantial resources in the belief that leveraging the majority of our clients’ purchasing power will enable those clients to experience a more optimal solution and better outcomes from a risk-reward standpoint,” noted Spagnola.

The ability to create registered mutual funds, funded from clients’ assets, was made possible by MACM’s success and growth. The group increased its discretionary assets under management from $1.5 billion in January 2012 to nearly $10.9 billion as of March 31, 2018. PFM’s asset management business overall had $86.8 billion in assets under management as of that date. The company also currently provides non-discretionary investment advisory services for $38.9 billion in assets.

“Our investment philosophy is not going to change,” Spagnola said. “We practice open architecture in how we customize client solutions, and we are purely independent in our approach. We are big believers in using passively managed index funds where it makes sense in efficient markets and then employing active managers where we think they can add incremental value over the benchmark. These mutual funds will continue to embrace that philosophy.”

PFM will receive no additional investment management fees from advisory clients for providing the mutual fund arrangement.

“I think our transparency is a big element as to why we’ve been successful,” Ammaturo added.

“We focus on transparency and disclosure when it comes to fees, not only at the investment adviser level but also at the underlying manager level.”