Case Study: Developed Specialized Group Trust to enable government plan to invest globally.

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An investment manager for several participants in a major government pension fund, consisting of the assets of multiple state and local governmental plans, wanted to be able to invest globally. While counsel for the business units wishing to gain global exposure wanted to proceed, several state attorneys believed that the fund’s enabling statute was antiquated, but precluded non-US investment. ( I disagreed with this interpretation, but as bank counsel, I could not give them advice! This is not for the case study!!!)

Solution Provided:

I suggested the creation of a US-based Group Trust in which several of the governmental units could participate. Units of the trust owned by the investing plans could be considered US investments, even though the Group Trust would invest abroad.


The door was opened for indirect foreign investment, the participating plans gained from higher returns available in global funds — and the investment manager and the bank were able to earn new fees from global investment activity. Everyone won.

Category : Case Studies