San Francisco City and County Employees' Retirement System is surveying the market for a general consultant, said Clare Murphy, executive director. Asset Strategy Consulting is the $10.8 billion fund's current consultant and is up for a five-year review. Responses to the request for information should be in by Nov. 17. In addition, the fund is seeking an "outreach consultant" to ensure its major money managers make adequate use of women-and minority-owned firms and local small businesses that engage in brokerage, subcontracting, joint ventures and buying supplies. The outreach consultant, which might be split into two roles, would build databases of potential suppliers and monitor compliance by managers. Responses are due by Nov. 18.
Swampscott (Mass.) Contributory Retirement System is searching for managers for new asset classes. The $25 million system is searching for a core domestic small-cap manager to run a $1.5 million portfolio and for a core real estate manager to run a commingled $1.2 million portfolio, after the new asset allocation has been adopted. The deadline for RFPs is Dec. 10. Segal Advisors is assisting. The new asset allocation is 41% domestic large-cap equities; 6% domestic small-cap equities; 10% international stocks; 35% domestic bonds; 5% real estate; and 3% cash. The system's previous asset allocation was 60% equities and 40% fixed income.
Minnesota State Board of Investments, St. Paul, is searching for an active domestic fixed-income manager to replace Credit Suisse Asset Management, which the $40 billion retirement plan terminated in September because of "considerable portfolio manager turnover," according to September board minutes. Howard Bicker, executive director, said the portfolio is between $500 million and $600 million. The board will select a new manager Dec. 8, said Mr. Bicker. While company executives are disappointed at Minnesota's decision, CSAM spokesman Jeremy Condie said, the firm recently added five portfolio managers to its core fixed-income team, bringing the total to 25. In addition, he said, performance for the strategy has not suffered as a consequence of staff departures and was in fact 120 basis points over its benchmark -- the Lehman Aggregate -- year-to-date through Sept. 30.
California Public Employees' Retirement System, Sacramento, board will consider an expansion of its $2.1 billion specialized real estate portfolio, which is below the bottom of the target range of 30% to 50% of total real estate equity. To hit the midpoint of the policy range, an additional $1.8 billion in capital would need to be committed in the next three years. To that end, staff for the $156 billion fund would research investment opportunities and present proposals on the following schedule: senior housing by December; Northern California urban projects by February; agricultural investment by April; international real estate by May; and internally or externally managed opportunistic investments by June.
California State Teachers' Retirement System, Sacramento, plans to seek independent fiduciaries to evaluate real estate pooled funds and other real estate-related projects. The $100 billion fund will issue an RFP for the independent fiduciaries. CalSTRS may hire up to six firms for the role. The fund has 2.7% of assets invested in real estate, although it has a target of 5%. The board also will ponder a move into high-yield bonds; the fund does not have any exposure to that area now.
Essex County Retirement Board, Salem, Mass., will search for an alternative investments manager as the result of a new asset allocation. RFPs will go out shortly. The $183 million system now has an allocation of 5% to alternative investments, up from 1% previously. The new asset allocation also shifted the system's domestic equity exposure to 36% from 55%; international equity to 10% from 7%; fixed income to 35% from 30%; high-yield bonds to 5% from 3%; and real estate to 6% from 4%. The remaining 3% of the new allocation is to cash. Segal Advisors assisted.
Salem (Mass.) Retirement System will begin conducting an annual asset allocation study this month. The $68 million system's current allocation is 45% in domestic equities, 39% in fixed income, 6% real estate, 6% international stocks, and 4% cash. Segal Advisors is assisting.
El Paso Energy Co., Houston, and Sonat Inc., Birmingham, Ala., are in the process of merging their defined benefit plans following regulatory approval of El Paso's acquisition of Sonat. Eddie Ammons, principal-benefits finance for El Paso, said investment consultant Mercer will begin an asset-liability study of the combined $1.2 billion pension plan. For now, all of Sonat's managers remain and have switched over their account records to Deutsche Bank, El Paso's custodian. Mr. Ammons expects the study and any changes in money managers to be complete by the end of the second quarter.