San Francisco City & County Employees' Retirement System staff recommended hiring active international small-cap equity managers AXA Rosenberg and Brandes Investment Partners to run a total of $290 million, replacing Capital Guardian Trust and Nicholas-Applegate Capital Management. AXA Rosenberg would get $195 million in core, while Brandes would receive $95 million in value.
According to a memo from Angeles, consultant to the $11 billion system, Capital Guardian would be terminated as manager of the approximately $98 international small-cap million portfolio because of performance and its growth-stock bias. Nicholas-Applegate would be terminated from the approximately $200 million international small-cap portfolio, which also had a growth bias, because of performance and the pending retirement of Loretta Morris, the firm's lead manager for international EAFE and small-cap portfolios.
Also, Nicholas-Applegate would lose a $192 million EAFE portfolio because of poor performance and staff turnover; assets would be distributed to existing international equity managers.
Chuck Freadhof, a spokesman for Capital Guardian, declined to comment. A spokeswoman for Nicholas-Applegate did not respond to a request for comment.
The board will vote on the recommendations Wednesday.