Kalamazoo (Mich.) Employees Retirement System might terminate a $20 million real estate portfolio run by Morgan Stanley, said John Nelson, chairman. The $407 million plan initially committed to Lend Lease's Prime Property Fund, but trustees are concerned about the future of that fund following the firm's sale to Morgan Stanley, Mr. Nelson said. The plan has a policy of not using investment brokers as money managers, he said. Trustees could revise that policy, or they could decide to terminate Morgan Stanley and seek a new real estate manager, he said. A decision will be made at the May 21 board meeting. The plan does not use a consultant.