At an April 1 city of Dearborn online pension discussion meeting, financial advisor Kevin Yousif told city officials that they were safe migrating responsibility for managing $65 million in pension funds from LSIA Institutional to newly formed Yousif Capital Management.
By SUE SUCHYTA
Times-Herald Newspapers
DEARBORN – City Council members expressed concern at a March 30 meeting about being rushed to accept the migration of pension fund management from LSIA Institutional to Kevin Yousif’s Capital Management group.
The city, which has $65 million in pension funds, was told that LSIA Institutional will no longer manage institutional pension funds, and the fund manager, Kevin Yousif, has created his own management group with his LSIA team to perform the same function.
Yousif reportedly sent a memo to council members the morning of March 31, to reassure them, and met online April 1 with city pension officials to offer further assurances.
The city council has the authority to approve the migration of management responsibility for Chapter 21 pension funds, whereas the Pension Board of Trustees has control over who manages Chapter 22 and 23 funds.
Chapter 21 funds are a closed police and fire retirement system plan. The last active member in the plan retired in 1995.
Chapter 22 is for active, terminated vested, and retirees and beneficiaries, and covers city employees hired before Jan. 1, 2002.
Chapter 23 is for police and fire employees with active members, terminated vested members and retirees and beneficiaries.
During the March 30 online special city council meeting, Councilmen Robert Abraham and Michael Sareini expressed their concerns over being called into a special meeting to approve a change on short notice.
Financial advisor Steve Riga said the funds remain with Comerica, and can stay there until due diligence is done on the Yousif Capital Management group.
Carl Meyers, chairman of the city’s pension plans, said during the April 1 meeting that he feels he has a fiduciary responsibility to make sure the pension funds are managed, and does not want them to just sit in the Comerica account. He said that what is being transferred to Yousif is the ability to manage the pension funds by doing trades.
John Krakowiak, a financial consultant with Graystone, said the city is opening itself up to liability by leaving the fund unmanaged if no one is overseeing it.
Yousif said he has worked with the city’s pension assets for many years, first with World Asset Management, and with LSIA since 2012.
He said despite his name being on the firm, he has taken his entire team from LSIA to management institutional pension funds, since LSIA will no longer be pursuing institutional investment management.
He said the investment group’s strategies are on yousifcapital.com.
Yousif said his team includes Gary Bender, director of fixed income; Dave Jones, a senior portfolio manager; Nicole Rivera, a portfolio manager; and Rosanna Bennett as chief compliance officer.
He said that while his group name is new, his longtime team is established. He said the team is currently managing $5.6 billion in pension funds, it kept more than 95 percent of its asset base, and it is managing the pension assets for the city of Southfield and for Macomb County.
“We are eager to take you, and this is an amicable departure; we did this over a month,” Yousif said. “We did a transaction with LSIA, and we could carry all of your information with us.”
He said Yousif Capital Management will provide continuity of performance and asset management.
The Chapter 22 and 23 fund management migrations were already approved by the pension board at an earlier date. It remains for the city council to make a decision on the Chapter 21 fund management at the future meeting.