Indiana State Teachers' Retirement Fund, Indianapolis, is searching for possibly seven active domestic equity managers to run a combined $671 million. The $8 billion pension plan could hire two small-cap managers each for growth, value and core and one manager for smidcap, said Steffanie Rhinesmith, investment officer-equities. Funding will come from its existing domestic small-cap managers, she said. Three of the fund's current equity managers can rebid: ING, $221 million in small-cap growth; Wells Capital, $220 million in smidcap growth; and Brandywine, $218 million in small-cap value. The three could see their portfolios remain the same, or they could be reduced or terminated, depending on evaluations and the search results, she said. Also, a $212 million Russell 2000 Value iShares portfolio managed by Barclays Global Investors will be terminated, she said.
"Our goal is to get more alpha from small-cap portfolios and we are hoping to do that by placing smaller mandates with more managers," Ms. Rhinesmith said.
The fund plans to move $200 million to domestic large-cap from domestic small-cap and initiate a search in the second quarter for domestic large-cap enhanced indexed managers and possibly 130/30-type managers, she said. "We have been overweight in small cap vs. the Russell 3000 and we are going to a more neutral stance," she said.