Fresno County (Calif.) Employees’ Retirement Association is cutting its number of active domestic large-cap equity managers in half, said Donald Kendig, retirement administrator, in an e-mail.
Based on a recommendation from investment consultant Wurts & Associates, the $3.9 billion pension fund board voted to terminate Winslow Capital Management and Wellington Management, which ran about $122 million each in domestic large-cap growth and value equity, respectively. Assets will be transferred to existing growth manager Waddell & Reed and existing value manager AJO, which could bring their total allocation sizes to roughly $245 million each. Allocations sizes are not yet final, Mr. Kendig wrote.
“In the current market environment of low volatility, portfolios have to be positioned more aggressively to get the same amount of active risk,” a letter from Wurts & Associates to the pension fund stated. The letter also said the pairing of AJO and Waddell & Reed fulfills the desire for a higher active risk portfolio and “simplifies things from a cost structure and operational perspective.”
Spokeswomen for both Wellington and Winslow declined comment.