The $2.6 billion pension fund conducted shortlist searches for three portfolios following the Oct. 4 board approval of a restructuring of its international developed markets equities portfolio. The restructuring is the result of the March 2017 reduction of the international developed markets equity target to 9% from 16% and the creation of an emerging markets equity target of 8%.
The changes in the developed markets portfolio resulted in the terminations of Grantham Mayo van Otterloo from a $114 million active value portfolio, State Street Global Advisors from a $79 million passive low-volatility portfolio and Mondrian Investment Partners from a $71 million active small-cap portfolio. Baillie Gifford, which ran a $199 million active growth portfolio, will be reduced to $77 million and its strategy changed to EAFE Pure Focus from ACWI ex-U.S. Alpha equities.
The fund is using $208 million freed up through the terminations and reductions to fund the emerging markets equity allocation, the Northern Trust portfolio and also to fund the chosen firms in two ongoing searches — an active international value manager to run $77 million and an active small-cap manager to run $26 million.
At its Nov. 1 meeting, the pension fund named Artisan Partners (APAM), First Eagle Investment Management and Hexavest as finalists for the remaining two portfolios. The managers are tentatively scheduled to make presentations at the board's Feb. 7 meeting.
Investment consultant Meketa Investment Group is assisting.