US- The San Francisco Employees' Retirement System (SFERS) has terminated its $225m US small cap core mandate with Dreyfus, following the asset manager's integration into Boston Company Asset Management, part of Mellon.
Over the last year, Mellon has been working to consolidate Dreyfus and the Boston Company, initially by consolidating analysts and more recently portfolio managers. Portfolio managers of the Dreyfus small cap core were asked to move to the Boston Company, refused and are to leave the firm on 30 June.
As a result, the Boston Company is to create a new small cap core product overseen by a three strong committee, a small cap growth manager, a small cap value manager, and the head of equity.
The committee will then decide within a range of 40-60% how much to allocate to value versus growth, or neutral.
One of the two small cap portfolios has a track record going back to 2001 and the other goes back to 1999. At the end of last year, each portfolio had limited assets under management.
“The small cap core product that they are talking about has no track record and no assets, and only limited track records and assets on the growth, and the value products,” said David Kushner, deputy director for investments at SFERS.
“With our $225m allocated to small cap core we felt this was not appropriate for us.”
Kushner said that a decision of how to reinvest the mandate has not yet been made, but said that the portfolio would most likely be liquidated and funds reallocated to existing managers and the Russell 2000 ETF to maintain an exposure to small caps in the interim.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers