Memphis Light, Gas & Water Division, Memphis, Tenn., named Federated Hermes, Garcia Hamilton & Associates, Highland Capital Management and Sterling Capital Management as finalists in a search for an active domestic short-duration fixed-income manager to run about $35 million.
The $1.7 billion pension fund’s board approved the finalists at its Jan. 18 meeting, spokeswoman Stacey Greenberg said in an email. The timing of the finalist presentations has yet to be determined, Ms. Greenberg said.
The pension fund began a search at its Oct. 26 meeting in order to lock in higher yields, according to minutes of that meeting. At the meeting, the board had approved parking $35 million in a passive short-term Treasury bond index fund managed by Vanguard Group during the course of the search.
Funding for the new short duration portfolio came from a reduction of $25 million in an active emerging markets debt portfolio managed by MetLife Investment Management and $10 million from a non-specified fixed-income portfolio managed by Brandywine Global Investment Management. The amounts remaining in the portfolios were not provided in the Oct 26 meeting minutes.
The reduction in the MetLife portfolio was because the "pension fund has too much international exposure, especially in fixed income," and the reduction in the Brandywine portfolio was to help reduce volatility in the pension fund's fixed-income allocation, according to those minutes.
Investment consultant CBIZ Investment Advisory Services is assisting.
