Fresno County (Calif.) Employees' Retirement Association has voted to replace Western Asset Management as one of its core fixed-income managers.
The decision was made at the board meeting Nov. 6, according to a live broadcast of the meeting.
The board of the $6.6 billion pension fund also approved a recommendation by NEPC, FCERA’s investment consultant, to invite Capital Research and Management Co. and Loomis, Sayles & Co. to make presentations to the board Feb. 5 about their core fixed-income strategies.
According to materials included in the latest board meeting agenda, FCERA’s investment team has been concerned by some recent departures of senior executives at Western Asset, including co-CIO Ken Leech, who took a leave of absence in August after receiving a Wells notice from the SEC.
In addition, underperformance relative to the benchmark by the core fixed-income portfolio managed by Western Asset also prompted NEPC and FCERA’s investment staff to consider replacing Western Asset.
As of June 30, FCERA had two core fixed-income managers: Western Asset (managing $326 million in assets) and J.P. Morgan Investment Management ($320 million in assets). These portfolios represented 4.9% and 4.8%, respectively, of the pension fund’s assets.
Western Asset does not manage any other portfolios for FCERA, according to the latest quarterly performance report, while Loomis Sayles manages a small $131,000 high-yield portfolio. Capital Research does not manage any portfolios currently for the pension fund.
