The Illinois Municipal Retirement Fund is pulling about $1.1 billion from BMO Global Asset Management due to poor performance.
The pension fund is terminating a portfolio of U.S. large cap value stocks managed by BMO and plans to oversee the money internally, according to a statement issued Monday.
BMO was listed in an Oct. 31 report by the IMRF as among the five worst-performing portfolios vs. benchmarks. The firm was also on the pension's performance manager monitoring list.
"Both performance and the opportunity to save fees by managing the money internally were factors," John Krupa, a spokesman for the Oak Brook, Ill.-based organization, said in an email.
Representatives for BMO in Chicago and Toronto weren't immediately available to comment.
U.S. pension funds have been examining ties with outside investment firms and increasingly having their own staff take over management of some assets. Earlier this month, the $395.3 billion California Public Employees' Retirement System, Sacramento, said it would reduce the use of external emerging equity fund managers.
BMO was paid $3 million in fees last year for the portfolio, according to an IMRF report.
The pension fund's portfolio was valued at $43.8 billion as of Nov. 30.
