US - State Street Global Advisors (SSgA) has lost an international equity index portfolio worth US$27bn with the California Public Employees' Retirement System (CalPERS) when the $208bn fund moved the entire portfolio in-house.
CalPERS claimed the move should save annual management fees of $1.3m.
Charles Valdes (pictured), chair, CalPERS investment committee, said: In managing this portfolio, State Street has met all of our objectives for external managers and has exceeded the benchmark. We will continue to partner with State Street in other ventures such as enhanced indexing and environmental investing strategies to continue what has been a satisfying long-term relationship.”
In 2005, CalPERS approved the internal management of a portion of the international equity index portfolio, which had been externally managed by SSgA.
The move has already seen the fund register management fee cost savings of approximately $1.3m annually as well as value added portfolio returns of $43m versus the benchmark since inception.
Under the new mandate, $97.2bn, or 74% of the pension fund's global equity assets, will be managed by CalPERS staff.
In related news, the pension fund selected 16 managers to invest in three asset classes - international fixed income, real estate equity securities and US global equity.
The real estate managers chosen were: Citigroup Property Investors, European Investors, Morgan Stanley Investment Management, Presima and RREEF America.
The six managers for the pool of international fixed income included: AllianceBernstein, BlackRock, Brandywine Asset Management, Mondrian Investment Partners, Morgan Stanley Investment Management and Pacific Investment Management Company.
CalPERS also chose Goldman Sachs Asset Management, Jacobs Levy Equity Management, Marvin & Palmers ASsociates and Turner Investment Partners for the US equity active growth manager spring-fed pool.
One additional manager, Intech, will be in the US equity enhanced indexing growth manager spring-fed pool with a broad large capital growth product as well as a large capital growth product.
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