Mendocino Adopts New Int’l Equity Structure, Will Seek Two New Managers

In order to streamline its investments in the asset class, the Mendocino County Employees’ Retirement Association has adopted a new structure for its international equity portfolio that will see it seek two new managers.

In materials related to its December 11 board meeting, the pension disclosed selecting a new international equity structure following a portfolio structure review conducted by the pension’s general consultant Callan in August. The new structure will see it retain four active managers, two each for emerging markets and small-cap, while significantly increasing its allocation to a core MSCI World ex-US Index fund, which will now account for 63% of the new portfolio structure and replace existing active managers Harbor, Oakmark, Mondrian, and EuroPacific.

Mendocino County will also seek a complementary emerging markets manager to current manager NinetyOne and a complementary non-US small cap manager to T. Rowe Price under the new structure. The pension said the new international equity structure is expected to be a more cost-effective investment strategy and will reduce tracking error of the portfolio.

Callan assisted in the portfolio manager review and restructuring process, which was adopted by Mendocino County in August.