The $20 billion Los Angeles County Employees' Retirement Association dropped Morgan Stanley Asset Management as a domestic small-cap manager running $340 million. The action was prompted by performance concerns. At presstime, company officials weren't available to comment.
The fund's midcap managers - Pilgrim Baxter and Putnam - will split about $150 million from Morgan Stanley's allocation. The remainder probably will go to an index fund of a yet-to-be determined style.
But the two midcap managers ultimately will see their allocations reduced as the fund cuts its domestic equity allocation to about 31% of assets from around 40%. Frank Russell is assisting in the changes.