Birmingham city commissioners approved a recommendation at their meeting on Monday, December 4, from the city’s finance director, Mark Gerber, to have the city’s investment advisor, Insight Investment, recommend and sign off on the city’s short-term investments.
Gerber explained that the last time the city’s investment policy had been reviewed was October 2011. “It’s always a good thing to review how we’re investing,” he said, as he introduced an investment advisor from Insight Investment, a privately-owned international asset management holding company that provides services to private investors, pension funds, sovereign wealth funds, insurance groups, local government, charities, and other financial institutions.
“More and more we’re finding dealers are hesitant to sign off on our investments. We’d like to have Insight sign off for us instead of the dealers, to allow the city to use more investors and dealers, and to look at much larger investments and different types of investments than the city has been investing in and provide better yields to the city,” Gerber told commissioners.
“What we’re dealing with are investments of shorter duration, those that are three to five years,” he explained.
“It says here that the investment committee is not longer in existence,” commissioner Rackeline Hoff said.
“We found the committee was a duplicate of the work Insight was doing here,” Gerber responded.
“How long ago was the committee disbanded?” Hoff asked.
“About seven or eight years ago,” city manager Joe Valentine said.
The representative from Insight said that they are not broker/dealers, but have a special list of broker/dealers inside Insight that they recommend to their clients. Mayor Andy Harris asked if those broker/dealers are employed by Insight, and she said, “Oh no. They’re completely separate from us. We don’t benefit from them.”
Gerber said the city pays Insight a fee based on the size of the portfolio.
Commissioners voted 7-0 to approve the investment changes.