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Pension Funds

Chicago Public School Teachers terminates Ivy Investments from equity portfolio

Chicago Public School Teachers' Pension & Retirement Fund terminated domestic large-cap equity manager Ivy Investments, said Angela Miller-May, chief investment officer of the $9.8 billion pension fund, in an email.

Ms. Miller-May cited "underperformance over several time periods" as the primary reason for the termination. "The recent departures of key staff did not help the case to retain the manager," Ms. Miller-May added.

The roughly $143 million from Ivy's termination will go toward pension payments, she said. There will not be a search for a replacement manager.

An Ivy official could not immediately be reached for comment.

Additionally, the pension fund approved a real estate pacing plan for fiscal year 2019, which includes fully liquidating its $154 million investment in UBS Realty Investors' core real estate fund — the UBS Trumbull Property Fund — because of "ongoing underperformance over several time periods," Ms. Miller-May wrote. The fiscal year starts July 1.

UBS officials declined to comment due to securities regulations.

Funds will be reallocated to existing real estate managers Clarion Partners, LaSalle Investment Management and PGIM Real Estate. As of Dec. 31, $48.7 million was invested with Clarion, $105 million with LaSalle and $162 million with PGIM.

Separately, the pension fund put international equity manager Ariel Investments on watch "for qualitative reasons," Ms. Miller-May wrote.

Ms. Miller-May did not elaborate but noted that "qualitative reasons" can cover anything outside of performance. Ariel manages about $80 million for the pension fund.

Mellody Hobson, Ariel's president, said the action was related to Ariel officials alerting the pension fund to two errors on a spreadsheet of individual stocks used by the firm's analysts. The errors did not have any consequences on the pension fund's portfolio, Ms. Hobson said.