Fresno County Employees pension fund narrows emerging markets equity search to 3 finalists

Fresno County (Calif.) Employees’ Retirement Association named ARGA Investment Management, Dimensional Fund Advisors and Pzena Investment Management as finalists in a search for a manager to run about $150 million in active emerging markets equities.

The $5.6 billion pension fund’s board approved the firms as finalists at its Sept. 7 meeting, said Donald Kendig, retirement administrator, in an email. The firms will make presentations at its Nov. 2 meeting and a selection will be made shortly thereafter.

The pension fund had conducted a shortlist search due to style-related concerns with current manager Mondrian Investment Partners. Mr. Kendig said that while Mondrian is a fine manager, the pension fund wants to split emerging markets equities into value and growth portfolios and is considering replacing the firm with a manager that has lower correlations with Baillie Gifford & Co., which runs about $127 million in active emerging markets growth equities.

FCERA will decide whether to hire a new manager and terminate Mondrian or retain Mondrian following the finalist presentations.

As of June 30, the pension fund’s actual allocation to international equities was 19%; the target is 21%.

Investment consultant Verus Advisory is assisting.

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