Kansas Public Employees Retirement System, Topeka, put Alliance Capital and Morgan Stanley on probation because of the investigation into both firms' mutual fund trading practices, according to a written statement by Rob Woodard, CIO of the $9 billion syhstem. Alliance runs $450 million in a passive EAFE portfolio and $320 million in active European equities; Morgan Stanley runs $574 million in an active EAFE portfolio.
"Probation implies a heightened level of scrutiny and monitoring," Mr. Woodard said. The board will discuss the issue at a Jan. 16 meeting.
Separately, the system next month will issue an RFP for a general consultant; incumbent Pension Consulting Alliance will be invited to rebid, Mr. Woodard said. KPERS "periodically bids contracts to assess the ongoing competitiveness and scope of available services," Mr. Woodard said. "This action in no way reflects dissatisfaction with PCA's performance."
Trustees are expected to consider finalists at their March 19 meeting.