PBGC Selects Participants for Smaller Asset Managers Program

The Pension Benefit Guaranty Corporation (PBGC) on Jan. 19 announced that it has chosen the firms that will participate in its Smaller Asset Managers Program (SAMP). 

SAMP is intended to reduce barriers to competition and create opportunities for smaller asset investment management firms. SAMP firms manage a portion of the PBGC’s U.S. core fixed income assets, which includes U.S. government securities, mortgage-backed securities, and corporate bonds. Smaller asset managers are subject to the same diligence, risk management, and reporting requirements as the PBGC’s larger asset managers.

The Firms

The PBGC selected six firms through a competitive procurement process. Three of them — Longfellow Investment Management, New Century Advisors, and Pugh Capital—are returning as participants; they had been part of the pilot program.

The six firms the PBGC selected are:

• Longfellow Investment Management
• Merganser Capital Management
• National Investment Services
• New Century Advisors
• Pugh Capital
• Ramirez Asset Management

To be considered for SAMP, asset managers had to meet the following requirements: 

• manage at least $250 million in assets;
• register with the Securities and Exchange Commission for the past five years; 
• comply with ERISA standards;
• maintain a positive net worth;
• acquire an ERISA fidelity bond in the amount of $1 million; 
• behave as a fiduciary; and
• always act in the best interest of PBGC.

About the Program

Before the pilot program, the PBGC’s investment management contracts often entailed minimum required assets under management of billions of dollars; small asset investment management firms could not meet a requirement that large. The PBGC started SAMP as a pilot program in 2015 to reduce barriers to competition and to create opportunities for those smaller firms. 

As it considered the pilot program to have been a success, in 2022 the PBGC’s Board of Directors approved making SAMP an ongoing part of the investment program. 

The firms will be evaluated on their performance against the Bloomberg U.S. Aggregate Bond Index, a gauge for investment-grade bonds that was also used during the pilot program.