Chicago Policemen's Annuity & Benefit Fund terminated three active international equity managers — Capital Guardian Trust Co., J.P. Morgan Asset Management and McKinley Capital Management, said Samuel Kunz, chief investment officer of the $3 billion fund, in an e-mail.
Capital Guardian managed $138 million; J.P. Morgan, $118 million; and McKinley Capital, $72 million.
“Overall portfolio allocation considerations drove the rebalancing decisions,” Mr. Kunz wrote.
One main factor behind the change, he said, was cross-correlation between these three longer-tenured managers and recently hired emerging market equity specialists EARNEST Partners and Lazard Asset Management, and active non-U.S. small-cap equity manager Acadian Asset Management.
EARNEST and Lazard manage a total of $186 million and Acadian manages $120 million.
Trustees of the Chicago Policemen's fund approved new targets for the non-U.S. equity portfolio, but Mr. Kunz said he could not disclose them. Rebalancing to the new targets will be at the discretion of the fund's staff, Mr. Kunz said.
Separately, the fund is in the midst of evaluating four semifinalists for its master trustee/custodial services RFP. The firms are incumbent Northern Trust and BNY Mellon for full services and for securities lending only, Citigroup and Deutsche Bank.
Mr. Kunz said trustees will consider a review of the four firms by the consultant NEPC at their Aug. 29 board meeting.
