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San Jose Police and Fire hires Jain’s new firm for emerging markets equity allocation

San Jose (Calif.) Police and Fire Department Retirement Plan hired GQG Partners to manage up to $40 million in emerging markets equity, a plan spokesman confirmed.

The approval was made at a meeting on Nov. 22. Investment staff were looking for a strategy that was “large cap, growth tilted and micro-aware, but focused on stock selection,” said a memo recommending the firm in the board's agenda materials.

The hiring of GQG Partners begins the $3.2 billion pension plan's new relationship with Rajiv Jain, GQG's chairman and chief investment officer. The pension plan terminated Vontobel Asset Management's emerging markets strategy in early 2016 after Mr. Jain left his position as emerging markets equity manager and CIO, said a report from the plan's investment consultant, Meketa Investment Group. Mr. Jain launched GQG shortly after.

The staff memo said GQG Partners manages $108.6 million across three strategies, with $33.3 million in the emerging markets equity strategy.

The pension plan is prohibited from being more than 10% of a money manager's assets under management, but the staff memo notes that the firm is likely to start receiving large inflows in the next quarter. It said the firm's hiring allows staff to begin the contracting process in anticipation of GQG Partners clearing the 10% threshold.

The Meketa report said the pension plan has a 28% allocation to equities, which includes emerging market strategies.