Fresno County (Calif.) Employees' Retirement Association has selected Northern Trust Asset Management to run a total of $1 billion in three passive index funds, confirmed Donald Kendig, retirement administrator for the $4.9 billion pension plan.
Northern Trust will manage $570 million in a S&P 500 index fund, $285 million in an MSCI Europe, Australasia and Far East index fund, and $190 million in a domestic Treasury inflation-protected securities index fund.
Funding for the S&P 500 and TIPs funds will come from liquidating the passive S&P 500 and TIPs funds managed by State Street Global Advisors, while funding for the MSCI EAFE fund comes from rebalancing.
Verus, Fresno County's investment consultant, conducted the search because the board wanted to increase its allocation to passively run investment services and reduce its exposure to actively managed risk.
In addition to SSGA and Northern Trust, BNY Mellon, BlackRock and Vanguard also submitted bids.
Separately, the board also approved terminating its $147 million allocation to Invesco's commodities strategy. The board intends to exit the asset class because commodities have been consistently underperforming, Mr. Kendig said. The redeemed funds will be redistributed among the pension plan's domestic small- and large-cap and international large-cap allocations.
Finally, the board has also put Pacific Investment Management Co.'s emerging markets debt local currency strategy on watch because its portfolio manager, Mike Gomez, has gone on sabbatical. The board has $185 million in the strategy.