Chicago Public School Teachers' Pension and Retirement Fund plans to cut its active core opportunistic fixed-income lineup to two managers from four, said Mary Sharon Reilly, president of the $9.8 billion fund. Fund officials want to reduce the plan's allocation to the style and reduce fees, she said.
Each of the existing managers - Banc of America Capital Management, which runs $103 million; Morgan Stanley Investment Management, $336 million; Smith Graham, $63 million; and Wellington Management, $340 million - will compete for the portfolios, which will be $295 million each. Mercer Investment Counseling also has presented the fund with a shortlist of managers for consideration: PIMCO, UBS Global Asset Management and Western Asset Management. The remaining $252 million run by the four current managers will be reassigned to other existing fixed-income managers in other styles.
Banc of America proposes to cut its fee to 10 basis points from the current 15; Morgan Stanley, to raise its fee to 18 basis points from 17; Smith Graham, to cut its fee to 12 basis points from 25; and Wellington, to raise its fee to 21 basis points from 20. PIMCO is proposing a fee of 28 basis points; UBS, 18; and Western Asset, 20.
