Massachusetts Pension Reserves Investment Management board, Boston, terminated BlackRock from a nearly $1.1 billion active core domestic fixed-income portfolio.
Staff of the $46.8 billion fund at the Dec. 7 board meeting cited turnover over a period of years in the firm's fixed-income division — when acquisitions more than doubled BlackRock's assets under management and product lineup — as well as weak performance as factors that led to a loss of confidence in the money manager's continued focus on fixed income.
The board voted to temporarily move the $1.056 billion to a Barclays Capital Aggregate Bond index account, also managed by BlackRock, until PRIM's annual asset allocation review in the first two months of 2011. That infusion will bring that index account to $2.346 billion.
Ken Anadu, PRIM investment analyst, public markets, told the board PRIM's concerns about turnover apply only to the firm's core fixed-income product. PRIM continues to have confidence in other BlackRock products such as the firm's passive, or model-based, fixed-income offerings.
“MassPRIM is a valued client and we're pleased they chose BlackRock's passive core bond strategy while evaluating alternatives to the active core bond account,” BlackRock spokesman Brian Beades said in an e-mailed statement.
As of Oct. 31, BlackRock was managing roughly 8% of MassPRIM's overall assets, with $1.29 billion in passive core fixed income; $1.056 billion in the terminated active core fixed-income strategy; $689 million in active global inflation-linked bonds and $563 million in passively managed TIPS.