District of Columbia Retirement Board has picked managers for two new asset classes — small-cap to midcap growth and value stocks — as a result of its recent restructuring, and adopted a new fixed-income structure.
The $1.7 billion system selected Warburg Pincus to run small-cap to midcap growth equities, with Trust Co. of the West as an alternate. It also selected Ariel Capital Management to run small-cap to midcap value equities, with Rothschild as its alternate. The system also terminated Alliance Capital as a domestic small-cap stock manager because it does not have small-cap as an asset class in its new structure.
Trustees agreed to enlarge Western Asset Management’s mandate to a core plus manager, and to hire PIMCO as its second core plus manager. Western currently manages 91% of the system’s fixed-income assets as a core manager. The system had been forced to give up PIMCO when it handed over the bulk of its assets to the U.S. Treasury earlier this year.
The system also has about 9% of its fixed-income assets with LM Capital. Trustees agreed to review LM and replace the manager if warranted. It also agreed to proceed with hiring Hughes Capital Management as a farm team manager — the hiring had been put on hold two years ago under a directive by the Treasury Department until the bulk of the system’s assets had been transferred to the federal government.
