Two San Jose, Calif., pension funds hired RWC Partners and Wellington Management to run a total of $195 million in active emerging markets equities, pending final legal review, said Ron Kumar, investment operations supervisor, in an email.
The pension funds conducted a shortlist search due to the underperformance of incumbent manager Comgest, which will be terminated following finalization of the hires, and also to provide more active management.
Wellington and RWC will run $80 million and $40 million, respectively, for the $3.7 billion Police & Fire Department Retirement Plan and $50 million and $25 million, respectively, for the $2.2 billion Federated City Employees' Retirement System. Partial funding will come from Comgest's portfolios of $34 million and $15 million, respectively, in the police and fire, and federated pension funds.
A spokeswoman for Comgest could not immediately provide a comment.
The pension funds will also increase the portfolios of active emerging markets equity managers Dimensional Fund Advisors and GQG Partners. Each will run $68 million for the police and fire pension fund, up from a respective $33 million and $50 million, and each will run about $41 million for the federated pension fund, up from a respective $25 million and $29 million.
Northern Trust Asset Management's passive emerging markets equity portfolios for the pension funds will be reduced as a result of the increase in active management. Currently, Northern Trust's portfolios for the police and fire, and federated pension funds are $190 million and $117 million, respectively, and will be reduced to a respective $51 million and $29 million.
Investment consultant Meketa Investment Group assisted.
