TCW ran $463 million in core-plus fixed income for the $11.6 billion KPERS, confirmed Robert “Vince” Smith, chief investment officer. The manager ran $350 million in core-plus fixed income for the $16 billion Texas system, confirmed system spokesman Bill Wallace.
Mr. Smith said the KPERS board will discuss the future of the allocation, which makes up about 20% of the system's $2.3 billion fixed-income portfolio, at its next board meeting on March 19. He could not say whether the money would be put out to bid or reallocated to existing managers.
Mr. Wallace said when news of Mr. Gundlach's termination became public, the Texas system had funded only $350 million of the $700 million assigned to TCW when it hired the firm Sept. 25. PIMCO, which also was hired in September to run $700 million in core-plus fixed income, will now run the full $1.4 billion.
TCW has been engaged in a very public battle with its former chief investment officer, Jeffrey Gundlach, who was dismissed from the firm in December and subsequently launched a competing firm, DoubleLine Capital. Several TCW portfolio managers have defected to join DoubleLine over the past several weeks. TCW filed a lawsuit against Mr. Gundlach and other former TCW executives on Jan. 7, claiming theft, fraud and breach of fiduciary duty, among other things.
TCW spokeswoman Erin Freeman declined to comment.