Santa Barbara County (Calif.) Employees' Retirement System hired Mellon Investments to run a total of $750 million in four passive portfolios, said Lauren Thompson, assistant CEO-investing, in an email.
The $3 billion pension fund issued an RFP in November to determine whether the pension fund could reduce fees by consolidating the four passive portfolios to a single manager. The four passive portfolios and their incumbent managers are a $329 million domestic large-cap equity portfolio managed by State Street Global Advisors, a $271 million domestic large-cap defensive equity portfolio managed by RhumbLine Advisers, a $104 million U.S. Treasury inflation-protected securities portfolio managed by BlackRock (BLK) and a $46 million U.S. intermediate-term fixed-income portfolio, also managed by BlackRock. All managers rebid for their individual portfolios.
As of Dec. 31, the pension fund's actual allocations to domestic equities, core fixed income and non-core fixed income were 19.8%, 15.7% and 9%, respectively.
Investment consultant RVK, which assisted with the search, recommended hiring Mellon Investments, formerly BNY Mellon Asset Management North America, based on the manager offering a fee break to manage all the portfolios, and the board approved the recommendation at its meeting Wednesday.