City of Los Angeles Deferred Compensation Board is choosing finalists in searches for managers to offer an active core bond investment option and a midcap equity option, said Steven Montagna, senior personnel analyst for the $2.3 billion 457(b) plan. Mercer Investment Consulting expected to recommend finalists to the investment committee as early as June, and the committee could make its recommendations to the full board as early as July.
Morgan Stanley currently offers the plan's active core fixed-income for the plan, which has $24 million. Fund officials may retain Morgan Stanley or replace it with another manager for the option. The plan doesn't currently offer a midcap equity option.
The board issued an RFP for active core bond manager last year because it had been a while since it had put that investment option out for bid. Fund officials are adding the midcap option to give participants more diversification.