US - The US$34.9bn Teachers' Retirement System of Illinois (TRS) has terminated Bear Stearns from a US$747m large cap value equity brief for performance and organisational reasons.
In addition, the board authorised searches for both a private equity consultant and general consultant, noting incumbent Callan Associates is allowed to re-bid.
TRS put Bear Stearns on its watchlist in October on the back of a Wells Notice issued by the Securities and Exchange Commission (SEC).
The SEC advised Bear Stearns Securities Corporation that it had authoritised staff to bring an enforcement action against Bear Stearns and its securities group with respect to the late trading of mutual funds.
Proceeds from the terminated large cap value equity mandate will be invested in the S&P500 index funds.
TRS also terminated LM Capital’s $190m core fixed income portfolio for “performance and strategic concerns” and transferred the funds to the Taplin, Canida & Habacht portfolio.
The pension fund plans to award aggregate active core plus mandates of up to $1.4bn as the result of a fixed income strategy study assisted by Callan, and has committed $100m in the Hines US Core Office Fund, Limited Partnership, for investment with the TRS POB account.
In other board action: Ariel Capital, which manages a $443m domestic equity small cap value mandate and Harris Associates, which manages a $472m international equity brief, were placed on TRS’ watchlist for performance and organisational changes respectively.
Northern Trust Investments, which manages $625m in various index assignments and had been on the watchlist for organisational concerns, was removed from the list.
TRS’ 2005 actuarial valuation revealed a slip in the funded ratio from 61.9% to 60.8%.
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