Boston Retirement System terminated J.P. Morgan Asset Management from its $199 million active domestic large-cap equity portfolio and Intech Investment Management from its $56 million active domestic large-cap growth equity portfolio, recently released board meeting minutes show.
The $4.9 billion pension fund issued an RFP in April to reduce the number of domestic large-cap equity portfolios from its existing seven in an effort to reduce fees. All of the system's incumbent large-cap equity managers — which were RhumbLine Advisers, D.E. Shaw Investment Management, J.P. Morgan Asset Management, Columbia Threadneedle Investments, Zevenbergen Capital Investments and Intech Investment Management — were encouraged to submit bids. As of May 31, the total allocation to the managers was $860 million, of 17.7% of the total fund. The target allocation to domestic large-cap equities is 17%.
At the July 17 meeting, the board voted to terminate core manager J.P. Morgan because the pension fund did not "need to use more expensive 130/30 strategies" to achieve good returns. Assets were reallocated to RhumbLine Advisers' existing passive domestic large-cap equity portfolio, giving it about $346 million.
The board also voted to move assets from core manager D.E. Shaw Investment Management's $215 million 130/30 strategy to its existing core enhanced domestic large-cap equity strategy, giving the latter portfolio a total of $298 million.
Within growth, the board voted to reduce the number of managers to one from two, reallocating Intech's assets to the other growth manager, Zevenbergen, giving that manager a total of $112 million in assets.
Value managers Columbia Threadneedle Investments and Aristotle Capital Management were scheduled to make presentations at the Aug. 21 board meeting. Further information on that meeting was not immediately available.
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Investment analyst John Kelly could not be immediately reached to provide further information.