Illinois Teachers' Retirement System, Springfield, added Northern Trust Global Investment to the $31 billion system's watchlist. Northern Trust, which manages $1.6 billion in passive equities and fixed income, was put on watch for organizational concerns; Three top NTGA team members recently left the firm, including CIO James Creighton, said John Day, system spokesman.
The system also switched the $389 million active domestic small-cap value equity portfolio managed by Ariel Capital to active domestic small-cap to midcap value equities, Mr. Day said. Ariel was removed from the watchlist, where it had been placed for performance earlier in the year.
Separately, the system plans to search for active domestic small-cap growth and value equity managers to run a combined $800 million and an active domestic large-cap growth equity manager to handle $458 million. How many small-cap managers will be hired and how much each will run have not been determined, Mr. Day said. Partial funding for the small-cap portfolio will come from the performance-based termination of NorthPointe Capital, which managed $415 million in active domestic small-cap to midcap value equities. Michael Hayden, NorthPointe managing director, did not return a call by press time seeking comment. Further funding details could not be learned by press time.
Funding for the large-cap search comes from terminating Geewax Terker, which ran an active domestic all-cap growth equity strategy. The system decided to move to a more specific large-cap approach, Mr. Day said.
Gordon Dickinson, the plan's consultant at Callan Associates, is conducting both searches, which were authorized at the system's Aug. 10 board meeting.
Also, Cap Guardian, which handles a $603 million active EAFE portfolio, was automatically put on watch after its performance fell below the system's benchmark.
Mr. Day said the following firms remain on watch: J.&W. Seligman, for performance of $261 million in active domestic small-cap to midcap growth equities; Artisan Partners, $389 million in active international equities, for performance and organizational reasons; and INVESCO, $749 million in active international equities, for organizational reasons and investigations into mutual fund market timing allegations.