Florida State Board of Administration, Tallahassee, dropped Northern Trust Global Investments a year after it was hired, said Michael P. McCauley, director of investment services and communications. The firm managed $2.3 billion in a Russell 3000 index fund, $1.5 billion in an MSCI All-Country World ex-US index fund and $2.3 billion in a Lehman Aggregate index fund for the $103.1 billion Florida Retirement System. FSBA decided to manage the assets internally, he said.
"We recently completed a financial management system upgrade that now allows us to pool assets within similar asset types and unitize the pricing on those pools," he said. "So now we manage all these assets within internally structured investment pools, at a lower management cost to the FRS."
Before the change, the system ran $48.19 billion internally, including $35.1 billion in domestic indexed equity, according to an FSBA report.
NTGI's fee was 0.75 basis point on total assets, so long as they stayed above $5 billion, he said. The FSBA cost for domestic equity is about 0.2 basis points, he said, adding that the costs of international equity and fixed income weren't immediately available.