Los Angeles City Employees’ Retirement System officials plan to issue an RFP at the end of this year for a manager to run $114 million in a U.S. small-cap equity emerging manager fund-of-funds portfolio, minutes from the Feb. 10 board meeting for the $13.9 billion pension fund show.
The search is a result of terminating Capital Prospects and Progress Investment Management Co. for performance. Capital Prospects manages a large and midcap equities fund of funds, and Progress manages an active emerging manager equities fund-of-funds portfolio, totaling $114 million between the two firms.
Marilyn R. Freeman, principal and manager of Capital Prospects, and Thurman V. White Jr., president and CEO of Progress Investment Management, could not be reached for comment by press time.
The assets from the two managers will be parked with Rhumbline Advisers, which manages a passive small-cap core equities strategy benchmarked to the Russell 2000 index for the pension fund. Rhumbline managed $1.5 billion for the pension fund as of Sept. 30.
Separately, LACERS placed Aegon USA Investment Management on watch for one year, effective Feb. 6, due to structural organizational changes including the departure of Thomas Swank, president and CEO; Brad Beman, global chief investment officer; and William Frank Koster, head of U.S. fixed income. Aegon appointed Kirk Buese as the interim CIO. LACERS staff will be conducting quarterly conference calls and on-site due diligence visits to monitor the transition of personnel. Aegon USA managed $184 million in high-yield bonds for the pension fund as of Sept. 30, LACERS latest investment report shows.