Who is Copper Rock?

In 2012, the NYC Deferred Compensation Plan Board decided to invest approximately 10% of the International Equity Fund into a separately managed account.  The separately managed account is run by Copper Rock Capital Partners and the fund invests in international small cap stocks.  The investment objective (as per Copper Rock documents) of the fund is “to outperform the MSCI EAFE Small Cap Index by 200-300 basis points (2-3%) gross of fees over a full market cycle”.  Copper Rock defines a “full market cycle” as 5 to 7 years.   The investment management fees for this fund are 0.70% on the first $50 million and 0.60% on the remainder.

As of 12/31/2016 (most recent available), Copper Rock was managing approximately $137,460,000 for the NYC Deferred Compensation Plan.  Based on Copper Rock’s fee structure, the total investment management fees paid in 2016 were approximately $875,000.  So far, this fund is performing worse than the benchmark and has clearly not met its investment objective.  In fact, the NYC Deferred Compensation Plan Board would have been better off if they simply selected a passive (index) fund for the MSCI EAFE Small Cap Index.

NYC DCP Copper Rock Performance vs. Benchmark (as of 6/30/2017)

1-year performance

3-year performance

Since inception

NYCDCP Copper Rock Fund (net fees)

14.5%

4.5%

10.8%

MSCI EAFE Small
Cap Index
23.6% 6.0%

12.2%

1 reply
  1. Jim
    Jim says:

    Does the DCP Board who chooses the funds look at the benchmark or is I it satisfied with a 14+% return irregardless of similar funds doing 20+% returns? It brings to light your often made point PETE with the lack of transparency with the DCP.

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