Kern County Employees' Retirement Association, Bakersfield, Calif., hired Mellon Capital Management to run $100 million in passive international large-cap equities, said Daryn Miller, chief investment officer.
The $5 billion pension fund hired the manager to reduce the plan's overweight allocation to international small-cap equities relative to its benchmark, and also to reduce fees.
Funding comes from reducing Fidelity Institutional Asset Management's active international small-cap equity portfolio by $80 million, leaving it with $82 million, and AllianceBernstein's active emerging markets equity portfolio by $20 million, leaving it with $101 million.
Separately, Mr. Miller said following an analysis of the pension fund's hedge fund portfolio, officials decided the pension fund was overdiversified and will move to reduce the number of hedge fund managers to 10 from 15 over the next several quarters. From which funds KCERA might make redemptions has yet to be determined, and any funds from redemptions would go to current managers.
Investment consultant Verus Advisory assisted.