San Francisco City & County Employees' Retirement System will issue an RFP for at least one manager to run a total of about $1.2 billion in active international core and growth equities, as part of the $14.2 billion system's first systematic review of the asset class in many years. The money is currently run by Capital Guardian, which manages an $819 million international core equity portfolio for the pension fund, and Oechsle International Advisors, which runs a $358 million concentrated international equity portfolio. Both managers will be eligible to rebid.
CapGuardian, which has managed the portfolio for 16 years, outpaced its MSCI EAFE during the 1990s, but performance has suffered in recent years because of its growth style, its overweighting of telecommunications and technology sectors, and weak stock selection, according to a memo from David Kushner, San Francisco's deputy director of investments. Future factors may favor Capital's style and overweighting of Japan, he added.
Kelly Malarky, spokeswoman for CapGuardian, declined to comment.
Fund officials plan to issue the RFP immediately; it will be posted at www.evestmentalliance.com. Proposals will be due March 24, and selection recommendations are planned for the board's June 13 meeting.
Angeles Investment Advisors is assisting.
Separately, the board approved a commitment of up to $25 million to CIM Urban REIT, an urban revitalization fund, and up to $25 million to Urban America II, which invests in major urban centers. Townsend Group was the consultant on both. They also approved a commitment of up to €20 million ($24 million) in Charterhouse Capital Partners VIII, a European buyout fund; Portfolio Advisors was the consultant.