American Airlines Inc., Dallas-Fort Worth Airport, is searching for one or possibly two managers to manage a portion of its $350 million emerging market value equity portfolio, said Kirk Brown, manager-international investments for the $8.4 billion defined benefit fund. A minimum of $75 million would be allocated to a single manager, with funding coming from the existing emerging market equity portfolio, currently managed by three firms: J.P. Morgan, $140 million; Morgan Stanley, $50 million; and Gulf Stream Global, $160 million. The search, which is being conducted in-house, probably won't be finished until late next year, since the selection process requires candidates to manage a paper portfolio for six to nine months. No RFPs were issued.
Colorado Fire and Police Retirement Association, Englewood, will issue RFPs for a structured large-cap domestic equity manager in the next couple of weeks to replace Oppenheimer Capital, which was terminated earlier this year. Finalists will be selected before the January board meeting. The portfolio will total approximately $100 million, said Bill Morris, chief investment officer of the $2.3 billion fund. The assets were temporarily placed in a Russell 1000 value index fund managed by State Street Global Advisors.
Montgomery County Employees' Retirement System, Rockville, Md., is searching for an international equity manager, said Patrick Bell, director of pension investments. The system has a target international equity allocation of 13% of total assets; the county recently passed legislation lifting the 10% ceiling on the asset class. The new manager will follow an active EAFE mandate, running 3% of the fund's $1.8 billion in total assets. The system is in the process of issuing RFPs, and hopes to pick a new manager by year end. Wilshire Associates is assisting.
Maryland Supplemental Retirement Agency, Baltimore, will issue RFPs for investment consultants by the end of October, said Mike Halpin, deputy executive director of the $1.5 billion defined contribution plan. Mercer's contract with the fund is set to expire soon and the firm is expected to bid. A final decision may come by early next year, Mr. Halpin said.
Public Employees' Deferred Compensation System of Kentucky, Frankfort, will search for a stable-value manager to replace an existing $74 million contract with Jefferson Life Insurance, according to Robert Brown, executive director for the $825 million fund. Trustees are expected to make a decision on a new stable-value provider by February. William M. Mercer will assist.
San Francisco City & County Employees' Retirement System plans to issue two RFPs. One search will be for a domestic core-plus manager to run $600 million, said Dick Piket, senior investment officer, fixed income, for the $11 billion fund. Partial funding will come from a $400 million domestic portfolio run by Scudder Kemper, which will be invited to rebid, he said. Additional funding will come from reducing corporate high-yield portfolios run by Oaktree, with $310 million, and W.R. Huff, $157 million. "The fund is trying to reduce its exposure to the domestic corporate high-yield market," he said. The fund's domestic fixed-income portfolio is close to $2.3 billion. The RFP will be issued by the end of October, he said. A search for a global fixed-income manager to run $750 million will follow by the end of December, said Mr. Piket. Funding will come from current portfolios. The fund's current global managers, UBS Brinson, with $406 million, and Merrill Lynch Mercury, with $293 million, will be asked to rebid.
Manchester (Conn.) Retirement Allowance Fund, with about $93 million in assets, is planning to search for a domestic large-cap value stock manager to replace Loomis Sayles, which was terminated recently for performance reasons, said Alan Desmarais, director of finance. The system has parked the $11 million that Loomis managed in a Russell 1000 value portfolio with State Street Global Advisors until it finds a replacement. PaineWebber assisted.
Sheet Metal Workers, Cleveland District, Local 33, may search for a large-cap value U.S. equity manager to replace Bartlett & Co. if its performance does not improve, said Barbara Hami, administrator. Bartlett runs $12 million for the $100 million defined benefit plan. "Almost every value manager (these days) is having a style performance problem," said Jim Miller, Bartlett chief executive. Ms. Hami said the board will discuss the matter further at a January meeting. Summit Strategies Group is assisting.
