The $2.033 billion Fresno (Calif.) City Employees Retirement System is reviewing its international portfolio because its managers have underperformed. The fund could terminate incumbent managers or hire additional firms, said Frank Balekian, trustee. The city invests 19% of its assets in international developed markets with INVESCO and Pyrford International. The fund has completed due diligence of a shortlist of four managers and two more managers are “waiting in the wings,” said Michael Schlachter, managing director at Wilshire Associates, declining to name them.
Schlachter said he’s going to conduct a “live workshop” at the investment committee’s April 20 meeting to model combinations of new managers, new and incumbent firms, and just the incumbents. The assessment will consider fundamental and quantitative management, style biases, and how managers interact. Balekian said the trustees will probably make a decision in May or June.
Last year INVESCO’s international equity strategy returned 10.8% gross of fees versus 13.5% for the MSCI EAFE Index. Pyrford returned 9.67%. INVESCO’s press office could not immediately comment and Pyrford could not be reached.
Fresno’s pension fund is comprised of the general employees’ and the public safety employees’ pension schemes, which pool their assets for investment purposes. The general employees plan is 134% funded and the public safety scheme is approximately 29% funded. For the fiscal year to date (July 1 until April 7), the investment pool returned 13.17%.