Public Trust Announces the Launch of California CLASS

Jun 22, 2022

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From the Desk of Public Trust Advisors, LLC
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Public Trust Advisors Launches a New Local Government Investment Pool in California

Sacramento, California, June 22, 2022 – Public Trust Advisors, LLC (Public Trust) is pleased to announce the launch of the newly created local government investment pool (LGIP), California Cooperative Liquid Assets Securities System (California CLASS). The investment program is a California Joint Powers Authority created pursuant to the California Joint Exercise of Powers Act and is governed by a Board of Trustees comprised of special district and city finance professionals.

The purpose of the California CLASS is to provide California public agencies with an additional diversification option for their daily liquidity and strategic reserve investments. Public Trust, in its capacity as investment advisor and fund administrator, is committed to providing California CLASS Participants with an exceptional user experience and professional portfolio management. The fundamental purpose of California CLASS is to develop and sustain an investment program wholly committed to the tenets of safety, liquidity, and yield for the benefit of participating public agencies. California CLASS will offer two investment fund options:

California CLASS Prime is designed to maintain a stable Net Asset Value (NAV) of $1.00, seeking to preserve capital, provide daily liquidity, and generate competitive returns for its Participants. S&P Global Ratings has assigned its ‘AAAm’ principal stability fund rating to California CLASS Prime, the highest rating assigned to principal stability funds.

California CLASS Enhanced Cash is a variable NAV fund that is most suitable for those public agencies seeking to develop a well-rounded investment program that would include strategic reserves. Enhanced Cash seeks to complement the daily liquidity offering of the Prime Fund by providing an investment option for those agencies seeking access to longer-dated securities that may generate higher income than those in a stable NAV Fund. The longer weighted average maturity (WAM) of the Enhanced Cash Fund relative to the Prime Fund makes it an appropriate option for any strategic reserves that an agency does not anticipate withdrawing for 12+ months. FitchRatings has assigned California CLASS Enhanced Cash a rating of ‘AAAf/S1’. According to FitchRatings a fund rated ‘AAAf/S1’ demonstrates the highest underlying credit quality and a very low sensitivity to market risk.

The California CLASS Joint Exercise of Powers Agreement (the JPA) was fully executed earlier this month by the California CLASS Founding Participants, who subsequently established the initial Board of Trustees, represented by Chairperson Christina Turner (City of Morgan Hill), Vice Chairperson Ryan Clausnitzer (Alameda County Mosquito Abatement District), Treasurer George Harris (City of Lancaster), and Secretary Margaret Moggia (West Basin Municipal Water District).

“California CLASS was created in response to the ever-growing investment needs of California public agencies. The Board of Trustees, in cooperation with Public Trust Advisors, the League of California Cities, and the California Special Districts Association, is excited to offer the Prime and Enhanced Cash funds to provide a cash management option that prioritizes the public agency investor experience.” said Ms. Turner, California CLASS Board Chair. “California CLASS provides valuable investment options and is a powerful diversification tool for public agency investors seeking safety, convenience, transparency, and competitive returns.”

“Given the amount of liquidity on many of our Association members’ balance sheets, we are tremendously excited to be launching California CLASS. The partnership with Public Trust provides a unique opportunity to work with an investment advisor that possesses a very successful track-record delivering cash management solutions for local governments nationally. We’re confident that the client service efforts, technological resources, and overall commitment to the local government investment pool space that Public Trust brings to California CLASS will result in a seamless cash management experience for California’s diverse public agencies,” said Neil McCormick, CEO of the California Special District Association.

Currently, Public Trust provides investment services for more than 5,000 local government investment pool clients nationally with current combined assets of more than $55 billion as of May 31, 2022. California CLASS is endorsed by the League of California Cities (Cal Cities) and the California Special Districts Association (CSDA). U.S. Bank, N.A. serves as the custodian, and Orrick provides special legal counsel to the program.

“Our team at Public Trust is thrilled to partner with Cal Cities and CSDA; together, we seek to provide an exceptional investment experience to California public agency investors. California CLASS was created for all types of eligible public agencies — small, large, and in-between — and it’s an honor to partner with two organizations that represent their memberships so professionally and faithfully. The professionals at CSDA and Cal Cities provide exceptional levels of service to their members and share the same client-first values that our team at Public Trust commit to achieving every day,” said Tom Tight, Managing Director at Public Trust. 

For additional information regarding the services provided by California CLASS, please visit the website at www.californiaclass.com or contact California CLASS Client Services at (866) 987-4445 or via email at clientservices@californiaclass.com.

About Us: Public Trust Advisors® investment services for the public sector include the management of local government investment pools (LGIP) and separately managed, individual investment accounts (SMA). Public Trust Advisors investment management services include administration (fund accounting, participant accounting, transfer agency, client services, sales, and marketing) and/or investment advisory (portfolio management, credit research, risk management, and portfolio valuation). For more information, visit us at www.publictrustadvisors.com. California CLASS is rated ‘AAAm’ by S&P Global Ratings. A ‘AAAm’ rating by S&P Global Ratings is obtained after S&P evaluates a number of factors including credit quality, market price exposure, and management. For a full description on rating methodology, please visit www.spglobal.com. California CLASS Enhanced Cash is rated ‘AAAf/S1’ by FitchRatings. The ‘AAAf’ rating is Fitch’s opinion on the overall credit profile within a fixed-income fund/portfolio and indicates the highest underlying credit quality of the pool’s investments. The ‘S1’ volatility rating is Fitch’s opinion on the relative sensitivity of a portfolio’s total return and/or net asset value to assumed changes in credit spreads and interest rates. The ‘S1’ volatility rating indicates that the fund possesses a low sensitivity to market risks. For a full description on rating methodology, please visit www.fitchratings.com. Ratings are subject to change and do not remove credit risk. 

This press release is for informational purposes only and should not be considered a solicitation of investment advisory services.

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