Asset Management

Our Approach

PFM’s asset management business provides independent, objective and well-informed investment advice and portfolio management for public sectors, charitable institutions and other institutional clients. We have a strong history of thoughtful innovation coupled with an abiding dedication to managing in a conservative manner, preserving client capital. As a result, our assets under management have grown from $1 billion in 1986 to $125.7 billion as of March 31, 2018, and we currently provide non-discretionary investment advisory services for $38.9 billion in assets as of March 31, 2018.

Disciplined Management

Clients value our fundamental approach to evaluating markets through rigorous research, which gives us the most informed views on sourcing new ideas and solutions. With broad and deep industry experience, our professionals use sophisticated modeling techniques and active management to structure investments that reflect our clients’ individual appetites for risk. Most important, the decisions and investments that we implement are solely for the client's benefit. We are not compensated for the transactions that occur, but rather for the advice we offer, making our priority independence and integrity.

Collaboration & Camaraderie

Our clients are at the center of every decision we make. Our goal is to forge lasting relationships grounded in trust and collaboration. Clients consider us a strategic partner and an indispensable extension of their teams. On behalf of our clients, our best minds collaborate and share knowledge, drawing insights from our specialist teams across PFM. We do not receive compensation through commissions. We do not sell consulting data to managers or otherwise receive remuneration from managers. We derive all of our fees from our clients, not from broker-dealer or investment firms.

Ingenuity

Our asset management team partners with clients to address investment challenges through creative reasoning, using proprietary and commercial software to develop solutions for our clients. Coupled with specialized guidance, our goal is to provide innovative investment solutions.

Our Solutions

Cash & Liquidity Management

We often manage accounts for clients whose policies limit them to government and federal agency securities, as well as those that allow investments in other high-quality instruments. Our primary goals are to maintain stability of principal, sustain liquidity and produce a competitive return. Diligent credit analysis, active management of short-term funds and careful attention to cash flows are some of the tools we use as we seek to generate consistent returns for our clients.

Within Cash & Liquidity Management, we have three offerings:

1. Local Government Investment Pools (LGIPs)

As a leading nationwide manager of public funds for more than 30 years, we have successfully managed pooled funds by providing investors with an opportunity to maximize their income potential while maintaining safety, liquidity and yield as their primary investment objectives.

In 1981, our professionals helped to create the first grassroots LGIP. Today, that first grassroots LGIP is still administered by us and now has close to 3,000 local government investors.

PFM’s asset management practice is an investment advisor and/or administrator to numerous statewide LGIPs around the country and to a registered money market fund designed for public sector and other institutional investors.

We offer investment platforms for both operating funds and bond proceeds, ranging from fully liquid, daily variable-rate programs to fixed-rate, fixed-term investment programs. Our approach to managing pools is to use a common infrastructure for operations while adapting programs to meet the needs of the local government and school investors in a state, giving clients a program designed to fit their specific needs.

We provide pooled investment program clients with the tools and services that enable them to build membership. We maintain a dedicated website for each program that gives investors easy access to account data, program documents, marketing information and more. We also developed the EON (Easy Online Network) system, a proprietary web-based money management solution that allows pool investors to view their accounts, perform transactions, retrieve statements and more.

2. Separate Accounts

Whether it is managing daily liquidity or a longer duration enhanced cash portfolio, PFM’s asset management practice is highly skilled in achieving client goals. For our clients with specialized needs, our priorities are safety, liquidity and producing competitive returns relative to a selected benchmark.

We design portfolios that are tailored to match each client’s specific investment policy and cash flow needs. Every client receives a customized solution with direct control of portfolio structure and credit quality. A benefit to our separately managed account clients is that depending upon their cash flow requirements, returns may be higher than institutional prime money market funds, while overall expenses may be less. Our approach involves both diversity of thought and meticulous monitoring of market sectors to quickly identify new investment opportunities and modify investment strategies as conditions change over time and as the market presents opportunities.

3. Stable Value

PFM has more than $2.5 billion in stable value assets, representing clients in the public, labor union and corporate segments of the market.

PFM’s stable value team applies a customized approach to building and managing stable value portfolios, with a commitment to understanding all phases of a client’s defined contribution plan, including liquidity needs, risk tolerance and investment objectives.

As part of a balanced investment menu consisting of stock and bond funds for growth, stable value funds provide diversification and can reduce overall portfolio risk. Designed with the goal of outperforming money market funds, stable value funds will likely play a growing role in retirement funds in the years to come, given demographics, the prospect of higher interest rates, and changes made to prime institutional money market funds.

We have a legacy of managing--and protecting--high-quality cash and fixed-income portfolios for institutional clients. For our clients interested in stable value funds, we can develop a customized portfolio for their unique plan characteristics and risk profile. Our strong credit orientation includes diversification among stable value wrap issuers, as well as underlying portfolio sectors and securities.

Short & Intermediate Term Fixed Income

PFM’s asset management practice has managed short- and intermediate-term fixed income portfolios for more than 30 years. Accounts under management consist of operating funds, capital reserves, insurance reserves, proceeds from the sale of bonds, and other funds with an investment horizon of up to ten years.

Managing fixed-income assets for public sector and other institutional investors is a core focus for us, and has been since our inception. We understand that the funds managed impact many interests and support a broad range of things that are vital to communities both large and small. Like our clients, the asset management practice’s investment objectives, in order of priority are: safety, liquidity and return.

We believe our clients deserve better than a “one size fits all” investment solution. We design portfolios that are tailored to match each client’s specific investment policy and cash flow needs. Our approach involves both diversity of thought and meticulous monitoring of market sectors to quickly identify new investment opportunities and modify investment strategies as conditions change over time and as the market presents opportunities.

Multi-Asset Class

Our multi-asset class management discretionary program combines the functional activities of traditional investment consulting with the benefits of timely decision-making and execution.

Working with endowments, foundations, hospitals, higher education organizations, Taft-Hartley, insurance, public pension and Other Post-Employment Benefit (OPEB) funds, we carefully balance our clients’ investment portfolio needs with their spending policies and liability streams.

Using an open architecture approach, we customize specific asset allocations to meet client risk and return expectations, whether institutions are focused on liability mitigation, spending requirements, preserving purchasing power, or surplus and reserve management. We seek to provide full transparency around fees, costs and results. For more than ten years, we have adhered to best-in-class transparency and disclosure by maintaining Global Investment Performance Standards (GIPS®) composite performance in addition to seeking to provide full fee transparency.

Our multi-asset class team addresses the challenge of timely execution of investment decisions by partnering with our clients to develop the investment strategy, portfolio guidelines and policies and expectations for how assets will be managed. We then execute transactions that make sense in the context of the market and the client's portfolio. We communicate regularly with our clients relating to any non-routine transactions, along with detailed periodic reporting. This facilitates the client's fiduciary review of our actions.

In a move to broaden the financial solutions it provides to clients, PFM, as the advisor, is partnering with State Street Bank and Trust Company to introduce three sub-advised mutual funds: PFM Multi-Manager Domestic Equity Fund, PFM Multi-Manager International Equity Fund, and PFM Multi-Manager Fixed-Income Fund. 

By pooling clients’ assets in these mutual funds, PFM will increase its purchasing power and expand the universe of available managers enabling all clients to experience an optimal solution while seeking better outcomes from a risk-reward standpoint.

Structured Products

PFM's structured products practice is dedicated to the development and implementation of investment strategies associated with municipal debt issuance.

We provide clients with highly specialized technical skills, market access and the experience required to devise an optimal and dynamic approach to each of our clients' specific funds.

In addition to market securities, we might use the following investment strategies:

Refunding/defeasance escrows — Structuring portfolios on a security-by-security basis as part of refunding transactions or cash defeasances of municipal debt. In all instances, we emphasize transparency, tax and Treasury regulation compliance and competitiveness in our process.

Structured investments – Competitively procuring guaranteed investment contracts, repurchase agreements, forward delivery agreements and other structured investment agreements to meet client objectives. Our recommendations are always made in the context of current and reasonably expected market conditions. We also advise our clients on the transfer, amendment, and termination of structured investments, including providing defensible third-party comparative pricing and evaluation methodologies.

PFM’s asset management colleagues have a fundamental commitment to independence, objectivity and serving only our clients' best interests. We have no preference for one investment strategy over another but rather are committed to leveraging our depth of resources and wealth of experience to develop optimal solutions to meet the unique needs of each one of our clients. Our clients suffered no loss of principal during the height of the financial crisis, and we continue seeking to identify prudent investment strategies in a dynamic market with reduced participation.

Bond Proceeds

While other firms may specialize in one facet of this business, we take a holistic approach on our clients' behalf, evaluating and advising on both active and passive strategies. Our approach to managing bond proceeds is built on a set of core competencies that have served our clients well. It relies upon:

  • A deep understanding of the federal regulations governing the investment of proceeds from tax-exempt bonds
  •  A history of thoughtful innovation that includes creating specialized commingled funds to facilitate investment, accounting and liquidity
  • Industry leadership in advising on structured investments

For More Information

Consult one of our professionals

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