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North Carolina Retirement Systems terminates 6 managers to reduce fees

North Carolina Retirement Systems, Raleigh, terminated six equity managers running a total of $3.3 billion as part of new state Treasurer Dale Folwell's mandate to reduce money management fees by a total of $100 million, according to meeting materials for the investment advisory committee's Thursday meeting.

The $87.6 billion pension fund terminated Longview Partners, which ran $1.636 billion in active global equities; Grantham, Mayo, Van Otterloo & Co., which ran $527 million in active international equities; Numeric Investors, $372 million in active emerging markets equities; Piedmont Investment Advisors, $345 million in active domestic equities; Leading Edge Investment Advisors, $231 million in active equities; and TimesSquare Capital Management, $216 million in active domestic midcap growth equities.

Specific information on how those funds have been reallocated was not made available.

The pension fund said in a presentation on efforts to reduce fees, a campaign promise Mr. Folwell made before his election in November, that the retirement system paid about $17 million in fees to the six managers during fiscal years 2015 and 2016. The pension fund is also “evaluating other public equity manager terminations with FY15-16 fees of $15 to $20 million,” according to the presentation.

The pension fund also cited about $10 million in annual fee savings that should come from credit hedge fund redemptions last year and this year, and that the retirement system is also “testing the market with a limited scale secondary sales transaction.”

Mr. Folwell's $100 million goal will be measured cumulatively over a four-year period, according to the presentation.

Other initiatives include shifting to the internal management of passive equities.

Phone calls to Mr. Folwell's office were not returned by press time.