US - State Street Global Advisors has held on to a US $4bn passive mandate following Chicago-based Illinois Teachers' Retirement System's (TRS) decision to put it out to tender.
The firm has been retained for two years because, according to Jon Bauman, executive director at TRS: “The System found their proposal to be most responsive to our RFI in terms of performance, fees, organisation, and competency in running large index funds.”
The decision is one of a raft of mandate changes made by the firm in the last few months following an asset allocation study in April 2002. These include the hiring of Grantham, Mayo, Van Otterloo & Co to manage a US$230m international equity emerging markets mandate and the hiring of Harris Associates and Artisan Managers to each handle an international equity return focused mandate of approximately US$215m.
Regarding private equity – an area the fund is looking to increase its exposure to – US$50m was allocated to Castle Harlan Partners IV for investment in buyout private equity, and up to US$50m to the OCM Opportunities Fund V for investment in distressed debt private equity.
Bauman added: “The majority of the manager changes are the result of manager structure studies arising from an asset allocation study.
“In addition, managers’ performance is reviewed on an ongoing basis. Several incumbent managers whose performance failed to meet our expectations or who had organisational issues arise were terminated.”
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