Taunton Contributory seeks passive managers, custodian

Taunton (Mass.) Contributory Retirement System is searching for a passive manager or managers to run about $60 million and a custodial bank.

Dahab Associates, investment consultant to the $275 million pension system, is assisting with the searches.

In the passive search, the pension fund intends to allocate to the following equity strategies: large-cap core, large-cap growth, large-cap value, midcap, small cap, international and emerging markets. The pension fund also intends to allocate to passive fixed income. Managers do not need to offer every strategy listed to be included in the search, but they must list all available options that they want considered for each strategy in their proposals.

No specific allocation breakout has been determined yet. The pension fund might use these allocations strategically and change the allocations over time, the RFP said.

Also for the passive search, only commingled or mutual funds will be considered. Although non-securities lending products are preferable, the pension fund will accept a securities lending submission if it is the only version available.

“We are not replacing any managers but augmenting our active managers with some passive index funds,” said Paul J. Slivinski, executive director of the pension fund, in an email. “Funding most likely will come from each active manager depending on asset class.”

Meanwhile, the search for a custodial bank is being conducted to comply with state law that says contracts have to be put up to bid every seven years. State Street is the current custodian and is invited to rebid.

The RFPs are available on Dahab’s website. Proposals for both searches are due at noon EDT on June 7. Selections are expected to be made sometime in July or August, said Mr. Slivinski.