By Muskan Arora
The $27bn Kansas Public Employees’ Retirement System begins
search for an active international equity manager, following concerns over one
manager on the roster.
In the May meeting, the system had placed JP Morgan
Investment Management on watch due to restructuring of the of the investment
team.
“Meketa and investment staff have separately met with the
firm and concluded that there is no immediate concern with the staffing change
and will continue to monitor the situation,” stated the recommendation by CIO
Bruce Fink at the July meeting.
However, both the consultant and staff believe it is
judicious to issue an RFP for an active international equity manager to provide
alternatives to the board if required.
The system allocates $6.4bn to its equity program which
represents 23.7% of the total fund, as of May 31.
Currently, there are four active managers on the roster,
each with 25% target allocation.
JP Morgan Investment Management will be next reviewed by the
firm in August.
Other managers on the international equity roster include Baillie Gifford, Wellington and Lazard.
The system had a positive return of 16.3% for its international equity portfolio for fiscal year 2023, against its benchmark of 12.7%.
Over very long time periods, the international equity portfolio has produced positive relative returns, as active management has added value relative to the benchmark.
The system’s portfolio returned 3.8% against a policy
benchmark of 4.2% in the first quarter of the year, and 10.8% against a
benchmark of 12.6% as its 1-year return.
