San Francisco City & County Employees' Retirement System hired Glass Lewis & Co. as proxy voting consultant, said Darlene Armanino, executive assistant, in an email.
The $25.1 billion pension fund issued an RFP in December because incumbent consultant Institutional Shareholder Services' contract was due to expire in June 2019. ISS was the other bidder.
Andrew Collins, SFERS' director of ESG investments, in a memo to the board recommended Glass Lewis because it offered the lowest overall fee structure, and because the firm's San Francisco location would offer highly responsive customer service.
Separately, the pension fund terminated Dimensional Fund Advisors from a $331 million active international small-cap equity portfolio and $198 million active domestic small-cap equity portfolio. Investment staff recommended the terminations as a result of its strategic investment plan to reshape the portfolio following SFERS' reducing the target to 31% from 40% in November 2017. A memo to the board from Kurt Braitberg, managing director, public markets; Han N. Pham, senior portfolio manager, public equity; and Alo Martins, security analyst, also noted Dimensional's domestic portfolio's "returns relative to its benchmark have deteriorated over the last several years" and the international portfolio in recent years "has underperformed its benchmark."
Charlene St. John, Dimensional spokeswoman, could not be immediately reached to provide comment.
The board also approved changing an internally managed $161 million investment in a Russell 2000 Growth index fund to a Russell 2000 Core index fund. Because the role of the growth index fund was to offset the Dimensional small-cap value portfolio, the index fund would need to convert to a core fund to "maintain appropriate portfolio exposures," the memo said. How the assets will be reallocated was not provided.
As of Feb. 28, the pension fund's actual public equity allocation was 35.7%.
