Bureau terminates agreement with Allegiant Asset Management Print E-mail
July 7, 2005

(COLUMBUS) - The Bureau of Workers’ Compensation (BWC) announced today they are terminating investment dealings with Allegiant Asset Management, a wholly-owned subsidiary of National City. BWC has asked that all remaining holdings in their large cap growth domestic equity fund be liquidated.

Ennis Knupp confirmed today that of the fund’s $71 million in losses, approximately $60 million resulted from management decisions by Allegiant.

“While we appreciate their attempts to improve the management of this fund, we cannot ignore the historical track record of an underperforming investment,” BWC interim Administrator Tina Kielmeyer said.

“We owe it to Ohio workers and businesses to invest intelligently and make sound financial decisions with their monies. If we remain idle and hope for a rebound, we would be acting irresponsibly and failing those customers we’re trying to help most – the injured workers and employers of Ohio.”

As of May 31, BWC’s carry-basis for the Allegiant Asset Management was $51.1 million, and its market value was $53.4 million. Despite writing off losses of approximately $50 million in fiscal year 2002 and approximately $20 million in fiscal year 2003, the bureau was still able to return nearly $2.2 billion in dividends to public and private employers during both of those years.

“It’s imperative to emphasize these losses have no impact on the value of the State Insurance Fund today,” Administrator Kielmeyer said.

In January 2001, BWC reallocated $250 million from other equity investments to provide initial funding to Allegiant. They received funding in March 2001.

BWC drew down Allegiant’s account $75 million in April 2004 and an additional $50 million in May 2005.

As of May 31, BWC has a carry-basis of $1.17 billion with 13 large-cap value managers. The market value of these firms was $1.25 billion.

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

###

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