Phoenix City Employees’ Retirement System named Baillie Gifford, Hansberger Global Investors and William Blair as finalists in its shortlist search for an active international large-cap growth equities manager, confirmed Greg Fitchet, investment manager of the $1.6 billion fund.
Mr. Fitchet said in a telephone interview that at an Aug. 18 special meeting, the board also decided to terminate Pyramis Global Advisors, which runs $137.5 million in an active international large-cap equities commingled fund benchmarked to the MSCI EAFE, once the new manager is hired. Performance was not an issue, Mr. Fitchet said; the fund changed its benchmark to the MSCI ACWI ex-U.S.
Mr. Fitchet said the system chose the finalists for the $117.5 million international growth mandate from a list of seven candidates presented by consultant R.V. Kuhns. The board will interview the three at its Sept. 22 meeting.
Mr. Fitchet said the remaining $20 million of the Pyramis portfolio will be placed in an SSgA ACWI ex-U.S. non-lending index fund.
“We’re trying to get more growth out of that portion of our portfolio,” Mr. Fitchet said. “About 23% of the ACWI ex-U.S. is in emerging markets.”
He said the system also has completed a shortlist search for an international small-cap equities manager to run $40 million, narrowing the list to seven semifinalists. Three finalists will be chosen to make presentations to the board in November, he said. The system aims to choose a manager in December. Funding will come from a $70 million international small-cap equity portfolio formerly run by AXA Rosenberg that has been in a BlackRock MSCI EAFE small-cap index fund since May. The remaining $30 million of the AXA account will be put into the SSgA ACWI ex-U.S. index fund, Mr. Fitchet said.
Following the hiring of the small-cap equity manager, the system will have just less than $334 million in its international equity portfolio, he said.