California Public Employees' Retirement System trustees approved a search for an external partner for its new $2 billion small-manager development program, after deciding against building an internal one, said Robert Boldt, senior investment officer for public markets for the $134 billion fund. Staff for the Sacramento-based pension fund will interview candidates, including: Affiliated Manager Group; Progress Investment Management; State Street Global Advisors; Strategic Investment Partners; United Asset Management; Northern Trust Global Advisors; and Met West for the partnership job. Other candidates could be interviewed as well. The program calls for CalPERS to find superior small managers, give them assets to manage and make equity investments in them. The partner would manage the program on a day-to-day basis. Mr. Boldt estimated he will recommend a partner to trustees in March and begin the program in May. There may be as many as 12 small managers in the program.
California State Teachers' Retirement System staff is proposing issuing an RFP for up to three general pension consultants for the $84 billion, Sacramento-based fund.
Trustees could approve the RFP on Wednesday; it then would be issued in December. Final filing date would be at the end of January and finalist interviews would be held in April.
Pension Consulting Alliance, the current general pension consultant, is expected to rebid.
The $24 billion Los Angeles County Employees Retirement Association approved an RFP for a nondollar bond manager. Funding for the $500 million allocation will come from Capital Guardian and Brinson Partners, both of which will bid. Proposals are due Nov. 20. A short list should be ready in February and a selection made in March, said Juan Almaguer, investment officer for fixed-income with LACERA. The search is primarily staff-directed, with Frank Russell assisting.
The $4.4 billion Indiana State Teachers' Retirement Fund, Indianapolis, will begin a search for midcap equity managers to run $80 million, said Robert Newland, investment analyst. The number of managers will depend on the types of responses, he said, and the board could hire one to four managers. The state's version of RFPs should be published on the Web at www.state.in.us/idoa/proc within the next few weeks, with a final hiring decision coming in January or February. After the midcap search, the Indiana fund will look for active large-cap equity managers and then REIT managers, he said. Callan Associates is assisting.
The Wisconsin Department of Employee Trust Funds, Madison, is preparing an RFP for a mutual fund window for its $800 million deferred compensation plan, said Mary E. Willet, director of supplemental retirement plans. The anticipated move is part of a new overall design dividing the plan into three tiers. Each layer is geared toward a different type of investor. The first tier is an asset allocation service in which a participant selects a model and the portfolio is automatically rebalanced every quarter, she said. The second tier is the current menu of 14 core options. The mutual fund window would be the third tier and is aimed at the more sophisticated investor. It's expected to offer a broad spectrum of anywhere from 200 to 3,000 mutual funds, she said. Users will be charged separate fees. The board is scheduled to vote on the RFP next month. The window should be in place by mid-1999, she added.
H.B. Fuller, St. Paul, Minn., will release an RFP for a passive international equity money manager in January, said Bill Gacki, directory of treasury. Funding will come from a reallocation of existing assets. Portfolio size has not yet been determined. The $180 million defined benefit plan does not have any money invested internationally, Mr. Gacki said, adding that there "may be some interest in an active manager" as the fund completes its current research.
