The $2.5 billion Philadelphia Municipal Retirement Fund raised its international exposure by eight percentage points to 28% of total assets, adding emerging markets equity and international fixed-income managers to its stable of active and indexed foreign stock managers. The fund also dropped one international stock manager and hired State Street Bank as its global custodian, replacing CoreStates Financial.
In emerging markets, the fund allocated $57.5 million each to Montgomery Asset Management and City of London Investment Management, and $10 million to CIGNA. Julius Baer and Morgan Grenfell were hired to run $100 million each in international bonds. WorldInvest, which ran $100 million in non-U.S. stocks, was terminated. The hirings resulted from an asset allocation study by Mercer.
Also, the fund picked hired Institutional Shareholder Services to vote its shares in companies in its portfolio. CoreStates previously voted the fund's proxies.
The fund earned a return of more than 18% for the year ended June 30, according to a report released at an investment committee meeting today. The fund's goal is to earn an actuarial return of 9% a year on a rolling five-year basis.