Memphis Light, Gas & Water Division, Memphis, Tenn., launched a shortlist search for a core fixed-income manager to run about $48 million, MLGW spokeswoman Stacey Greenberg said in an email.
The $1.6 billion pension fund's board approved a search at its March 15 meeting due to the underperformance of current manager Xponance, recently released meeting minutes show. Xponance will be included in the search.
According to the minutes, the MLGW pension fund is one of only three clients invested in Xponance's Differentiated Income strategy, and performance has been disappointing for the past three years. Xponance's website said the strategy provides a yield-driven approach, which is enhanced through callable securities, optionality, security structure, and variable rate coupons.
The strategy uses only domestic, investment-grade securities and is considered benchmark agnostic, according to the website. Leonard J. Oremland, managing director and head of distribution at Xponance, could not be immediately reached for comment.
Investment consultant CBIZ Investment Advisory Services is assisting.