Public School Teachers' Pension and Retirement Fund of Chicago will terminate Chancellor LGT as a U.S. large-cap growth equity manager, sharply cut back the portfolio of large-cap value manager Oppenheimer Capital and move the money to other firms.
Chancellor had managed $438 million and Oppenheimer ran $130 million for the $8.1 billion system. Oppenheimer retains $2 million.
The system will hire Morgan Stanley and ABKB/LaSalle as Public REIT managers handling $58.33 million each to be funded by rebalancing. Small amounts of additional assets are going to three large-cap growth equity managers.
Fidelity now manages $40 million; Holland, $5 million; and Zevenbergen, $10 million. On the bond side, ANB will get an additional $203 million, boosting its indexed portfolio to $442 million. Miller, Anderson & Sherrerd and Wellington each will get $101 million, bringing their portfolios to about $220 million.
The board also approved beginning a search for additional emerging minority managers. The fund has earmarked up to $60 million for the new mandates.
The reason for Chancellor's termination was professional turnover and other issues. William M. Mercer recommended the move.Alex Trower, Chancellor spokesman, said the firm was disappointed to lose the fund as a client and hopes to work with it again.
Legg Mason Real Estate Services acquired Radnor Advisors, a real estate money manager with $300 million under management. Managing Director Richard Layman declined to say how much Radnor sold for, but said the sale was financed with cash and future payments based on performance.
The merger will push Legg Mason's assets under management to more than $1 billion, said Douglas Callantine, senior managing director at Legg Mason.
Mr. Layman, who came from Radnor, will lead Legg Mason's equity real estate activities. California Public Employees' Retirement System, Sacramento, yesterday raised its U.S. equity allocation to 41% from 38%. The fund also reduced its alternative investment allocation to 4% from 5%, its cash allocation to 1% from 2%, and its real estate allocation to 6% from 7%.
U.S. bonds remain 24%; non-U.S. stocks stay at 20%; international bonds will continue to be 4%.
Officials of the $124 billion fund wanted to increase its commitment to U.S. equities.
