On March 17, 2022 the City was notified by Securian Asset Management , who was serving as an investment manager of the City's longer term portfolio (approximately $26.3 million in investments) that they have elected to terminate their agreement with the City of Shakopee.  Per a conversation with the firm, as a result of a comprehensive review of their business a decision was made to exit fixed income, real estate securities and real asset income investment strategies. 

The investments previously managed by Securian are being managed internally by the City's finance department.  If, at any point in time, it is determined there is a cost/benefit to hiring a new investment manager for part or all of the portfolio, it continues to be authorized by the investment policy under Section D.4 Delegation of Authority.  However, staff would ask for council approval of any investment manager contract.

The investment policy was last revised on April 2, 2019.  The investment policy currently requires the city to report quarterly the results in comparison to the benchmark "blend of eighty (80) percent of the Bloomberg Barclays US Treasury 1 to 5-year Index and twenty (20) percent of the Bloomberg Barclays MBS Conventional 15-year index".  The benchmark was crafted with assistance with Securian as its specific to our longer-term portfolio and a portfolio that contains a significant amount of mortgage backed securities (MBS). 

Staff is recommending modifying this benchmark to a comparison with the U.S. Treasury.  This is a more common comparison used for local government portfolios and easier to understand.  This will also allow the City to do quarterly reporting all in one comprehensive reports (previously staff was providing two quarterly investment reports to meet investment policy requirements).  The current treasury benchmark being provided on the comprehensive report (provided by Wells Fargo) is the three year treasury, which aligns with the weighted average maturity of all city cash/investments as of December 31, 2021 of 3.0 years. 

All aspects of the investment policy were reviewed and no other changes are recommended.