Lafayette County $20M investment sees growth in first 6 months of fiscal year
Published 5:00 am Thursday, October 19, 2017
Green Square Capital, the investment firm in charge of the $20 million fund created following the sale of Baptist Memorial Hospital, gave the Lafayette County Trust Fund Trustees some good news Monday — about $1.1 million worth of good news.
The fund has gained 5.5 percent since the first of the 2017 fiscal year that runs from March 1 to April 30.
Over the last three years, the county has received a total of $1.7 million in distribution from the fund.
The investment balance for the year stands at $21,246,062, while the economic value of the trust with distributions is $22,998,526. Through Sept. 30, the fund was up almost $3 million since inception.
In order to maintain that 5.7 percent investment increase, the trustees discussed how conservative the board should be prior to the expected distribution in order to protect their gains.
According to county officials, the distribution is needed to subsidize the 2017 budget. The county didn’t receive a distribution in 2016 due to the fund falling below the $20 million level. The county received $600,000 in distribution in 2014 and $500,000 in 2015. On Monday, the board accepted a $635,181 distribution for the 2016 fiscal year, which will go toward paving and fixing roads in all five districts.
The projected earnings for 2017 are expected to top 2016 at $680,746.
Most of the asset allocation for the fund is in fixed income at 58.8 percent. Just over 40 percent are in equities and .8 percent is in cash equivalents.
Green Square’s Steve Sansom told the trustees, who are also the Lafayette County Board of Supervisors, that the current economic atmosphere is showing continued growth.
The second quarter GDP growth was revised up to 3.1 percent annualized, the fastest pace since the first quarter of 2015.
“While hurricanes and other natural disasters may provide some softening to that growth, rebuilding efforts are likely to provide a boost to GDP in the four quarter,” he said.
While The Fed left rates unchanged in September, one more hike this year is expected. Unemployment ticked up slightly in August but labor conditions remain tight and manufacturing showed signs of strength.
Board President Jeff Busby asked that since things seem stable, if it would be a good time to put a few more points, “about 5,” into equities, which are a higher risk than fixed income investments but can also bring higher returns.
Sansom said he believes the allocations should remain the same but that his company will go back and look at what raising equities to 45 percent of allocation would look like and report back to the board.