US - The Fresno County Employees Retirement Association (FCERA) has terminated Brandywine Global Investment Management for poor performance, despite the firm offering to drop its performance fee to zero.
According to an agenda from the board's meeting this week, Brandywine's US$100.5m small-cap value equity mandate has underperformed the Russell 2000 Value Index by 44 basis points since its inception in August 1995.
Wurts & Associates consultant Scott Whalen told the board: "They did come back to try to make a shoe string catch by offering a zero fee for their performance-based fee, but our view is this will have no impact on their strategy or their expected return going forward."
Officials at Brandywine could not be immediately reached for comment.
Trustees will park the assets in the State Street Small Capitalization Value Index while it discusses the merits of active versus passive management of small-cap value strategies.
Separately, the board short-listed three funds to interview for a passive commodities mandate. The three firms are Barclays Global Investors, Credit Suisse Asset Management and Pacific Investment Management Co.
In August, the $2bn FCERA decided to eliminate its 2% allocation to infrastructure and instead increase its allocation to commodities to 3%. (Global Pensions; August 17)
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