June 27, 2013 - Public Employees Retirement Association of New ...

Watch List Test
As stated in PERA’s investment policy, the following represent guidelines to be used in making a
recommendation to the Investment Committee with regards to placing a traditional manager on the Watch
List:
Test 1: If the manager’s rolling three-year return (gross of fees) falls below the rolling three-year
return of the benchmark for three consecutive quarters.
Test 2: If the managers rolling three year return for three consecutive quarters ranks in the bottom
third of the Consultant’s peer group universe.
As of March 31, 2013, the strategy did not pass either Watch List Test.
Exhibit 9
Watch List Test 1:
TimesSquare Small/Mid Cap Growth Equity Strategy (gross of fees)
Rolling Three Year Annualized Performance vs. Benchmark
For Periods Ending 3/31/2013, 12/31/2012, and 9/30/2012
3 Years
ending
3/31/2013
3 Years
ending
12/31/2012
Exhibit 10
Watch List Test 2:
TimesSquare Small/Mid Cap Growth Equity Strategy (gross of fees)
Rolling Three Year Annualized Performance vs. Peer Group Universe
For Periods Ending 3/31/2013, 12/31/2012, and 9/30/2012
3 Years
ending
9/30/2012
TSCM Smid Growth 19.25% 16.44% 18.25%
Russell 2500 Growth 14.95% 13.78% 15.17%
Difference 4.30% 2.66% 3.08%
3 Years
ending
3/31/2013
3 Years
ending
12/31/2012
3 Years
ending
9/30/2012
TSCM Smid Growth 19.25% 16.44% 18.25%
eVestment Alliance Small/Mid Cap Growth Equity Universe Median 15.01% 13.54% 15.47%
TSCM Rank in Universe 9 23 24
Suggested Questions for the Investment Manager
1) In what sectors are you currently finding opportunities?
2) Are there any significant changes in portfolio positioning in the last year or so?
3) What do you believe are the greatest risks in our portfolio today? What are the greatest
opportunities?
[As a reminder, we have not conducted full diligence on, or reviewed the legal documents for, this
investment due to its legacy status in your portfolio.]
Manager Update Memorandum Page 7 of 7
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