Fulton County Employees’ Pension Fund, Atlanta, hired State Street Global Advisors to manage $204 million in passive domestic large-cap equities as part of the implementation of a new asset allocation, said Tammy Goebeler, investment officer, in an e-mail.
The $1.2 billion pension fund approved a new asset allocation in September as the result of a study conducted by new investment consultant NEPC. At its Nov. 12 meeting, the pension fund’s board began implementing changes in the pension fund’s domestic large-cap equity portfolio, which makes up 34% of the pension fund’s overall assets and will now be evenly split between active and passive, Ms. Goebeler said in an e-mail.
The pension fund hired SSgA to run the $204 million passive portfolio and also increased the allocations to active domestic large-cap equity managers Eagle Capital Management, which runs a value portfolio, and Winslow Capital Management, which runs a growth portfolio, to $102 million each. Eagle previously managed $49 million and Winslow, $100 million.
Managers terminated as a result of the changes were active domestic large-cap equity managers GAMCO Investors and Wedgewood Partners, which each managed $95 million, and Herndon Capital Management, which ran $48 million, all the result of the allocation changes. The pension fund also terminated RhumbLine Advisers, which ran a $120 million passive portfolio to move to SSgA’s passive commingled trust portfolio with “lower fees and better liquidity,” Ms. Goebeler said.
Performance was not a determining factor in the terminations, Ms. Goebeler said, merely the asset allocation changes.
The changes approved in September included dropping the overall equities allocation two percentage points to 73% from 75%. Within that amount, the new asset allocation reduced domestic large-cap equities to 34% of the total fund from 43%, domestic small- and midcap equities to 14% from 17%; increased international equities to 20% from 15%; and created a new 5% target to emerging markets equities.
Total fixed income dropped to 22% from 25%. Within that allocation, domestic core fixed income fell to 17% of the total fund from 20% and global fixed income remained the same at 5%.
The pension fund is also adding a 5% target to global asset allocation strategies.
Ms. Goebeler did not say when other changes will be implemented.