Illinois State Universities Retirement System, Champaign, terminated Ariel Capital Management, which ran $40 million in active domestic midcap equities for the $14.2 billion system.
Ariel doesnt fit well with the systems strategic goal to reduce U.S. equity exposure, said Dan M. Slack, executive director. It makes more sense to have broad market managers and managers more market neutral, he said. Also, weve had disappointing investment performance with Ariel.
Mellody Hobson, Ariel president, couldnt be reached for comment.
The money was moved into an existing $923 million Wilshire 5000 index fund managed by RhumbLine Advisers while system executives decide whether to search for a replacement or move the money to existing managers, said Mr. Slack. The board could make a decision in the fall, although it hasnt set a time frame, he said.
Ennis Knupp assisted.