Pennsylvania Municipal Retirement System, Harrisburg, hired MFS Investment Management to run $150 million in active domestic large-cap value equities and Smith, Graham & Co. to run $50 million in active domestic small-cap value equities.
The $3.5 billion pension fund's board approved the manager selections at its Sept. 23 meeting, CEO Timothy Reese said in an email.
Mr. Reese said the portfolios are "actively managed and complement PMRS 'core and satellite' approach" with a core passive management structure with "satellite investments that are actively managed."
At its May 20 board meeting, the pension fund had hired five managers to run passive portfolios. At that meeting, the pension fund had hired Mellon Investments to manage up to $400 million in passive core fixed income, State Street Global Advisors to manage up to $335 million in passive international equities, Northern Trust Asset Management to run up to $300 million in passive domestic large-cap equities and up to $130 million in passive domestic smidcap equities, Xponance to manage up to $300 million in passive domestic large-cap equities and RhumbLineAdvisers to manage up to $170 million in passive global minimum-volatility equities.
There was no further information on funding for the portfolios or whether the pension fund would terminate any or all active managers.
According to the pension fund's most recent investment report, as of June 30 LSV Asset Management ran a $216 million domestic large-cap value equity portfolio and a $100 million domestic small-cap value equity portfolio. Partial funding comes from these and other portfolios, Mr. Reese said. He would not provide further information.
As of June 30, the pension fund's actual allocation to domestic equities was 41.8%; the target is 40%.
Investment consultant Marquette Associates assisted.