SAN DIEGO Brandes Investment Partners LP was hit hard by weak equity markets and retail outflows, and institutional clients have noticed.
The San Diego-based value equity and fixed income managers assets dropped 23% in the first six months of the year to $86.4 billion, according to data provided by the firm.
Of the $25.3 billion decline, about $13 billion was due to market fluctuations, about $6.7 billion to client outflows mostly retail and about $5.6 billion to underperformance, said Edward Blodgett, director of the private client group at Brandes.
Assets are down 26.2% from year-end 2006.
Though most client defections have been on the retail side, some institutional investors have terminated the firm in recent months or are keeping an eye on performance.
• The $17.2 billion Indiana Public Employees Retirement Fund, Indianapolis, terminated Brandes in November from a $413 million active domestic midcap value portfolio. Officials at the system wanted to use a relative value manager to better meet risk and diversification objectives, said Jeffrey Hutson, spokesman. In March, the fund replaced Brandes with Artisan Partners LP, Milwaukee. Brandes still manages $493 million in active global value equity for Indiana PERF.
• The $16 billion San Francisco City and County Employees Retirement System dropped the firm in December from a $71 million international small-cap value equity strategy for performance reasons.
• The $38.4 billion Teachers Retirement System of the State of Illinois, Springfield, has the firm on watch, also for performance, said spokeswoman Eva Goltermann. Brandes continues to manage a $1.2 billion international equity portfolio for the pension fund.