Bureau terminates Oechsle international advisors Print E-mail
Management changes, underperformance cited in recommendation to terminate

July 14, 2005

COLUMBUS – The Bureau of Workers’ Compensation (BWC) announced today they are terminating investment dealings with Oechsle International Advisors based on a recommendation from Ennis Knupp.

As part of its recommendation, Ennis Knupp cited recent changes with regard to the composition of the new portfolio management team, including new staff and a new management approach.

Ennis Knupp also expressed concern regarding historical underperformance. Despite generating positive returns in 2003 and 2004, Oechsle has underperformed the MSCI EAFE Index, the benchmark for its asset class, over the past five years.

“Today’s decision represents another critical step in BWC’s efforts to purge poor-performing managers from its portfolio,” BWC interim Administrator Tina Kielmeyer said. “While Oechsle has generated solid returns in the past few years, their continued underperformance cannot be tolerated if BWC is to uphold its fiduciary responsibility and effectively manage the monies of Ohio’s employers and injured workers.”

As of May 31, the carry-basis of BWC’s investment in Oechsle was $186 million, and the market value was $208 million.

Oechsle responded to a May 2000 request for proposal seeking international equity investment managers. BWC allocated them $200 million in February 2001. Additionally, BWC converted approximately $10 million in securities to Oechsle in March 2004.

As of Dec. 31, 2004, Oechsle’s five largest holdings were with Volkswagon, Schering, Bayer, Telefonica and Orix.

As of May 31, BWC has a carry-basis of $1.74 billion with 10 international equity managers. The market value of these firms was $1.95 billion. International equity managers invest primarily in common stocks and other equity securities of foreign issuers.

The bureau’s State Insurance Fund continues to be fully funded with an approximate value of $14.3 billion. It also possesses a surplus.

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MEDIA CONTACT: Jeremy Jackson, Ohio Bureau of Workers’ Compensation, (614) 752-7558 or Emily Hicks, (614) 728-6197