COMP BUREAU FIRES ASSET MANAGEMENT FIRM:

The Ohio Bureau of Workers’ Compensation announced it is terminating investment dealings with Allegiant Asset Management, a wholly owned subsidiary of National City. BWC has asked that all remaining holdings in its large-cap growth domestic equity fund be liquidated. Of the fund’s $71 million in losses, about $60 million resulted from management decisions by Allegiant.

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 those years.

The losses “have no impact on the value of the State Insurance Fund today,” BWC Interim Administrator Tina Kielmeyer said in a statement.

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. BWC said its fund continues to be fully-funded with an approximate value of $14.3 billion. It also possesses a surplus.