Milwaukee County Employees' Retirement System restructured its active domestic midcap equity portfolio, said John Martin, trustee. The $1.5 billion pension fund hired core managers EARNEST Partners to manage $45 million and Reinhart & Mahoney Capital Management to run $10 million, and value firm Hotchkis and Wiley Capital Management to handle $45 million, Mr. Martin said. Funding will come from terminating U.S. Bancorp, which runs $100 million in active domestic midcap core equities; Mr. Martin said the board cited performance issues and a need for diversification. Lynn Harrington, who oversees relationship management at U.S. Bancorp, couldn't be reached for comment.
The system also restructured its fixed income portfolio, hiring Banc One Investment Advisors to manage $136 million in active core and adding $40 million to Loomis Sayles' active core portfolio, raising it to $136 million. Partial funding for the changes came from terminating Wells Capital Management, which succeeded Strong Capital Management as manager of a $113 million active fixed-income core portfolio after buying Strong. Additional funding came from reducing a Mellon Capital Management Lehman Aggregate index fund to $136 million from $200 million. The board cited concerns about Strong's involvement in the mutual fund trading scandal and also wanted more diversification.