San Diego City Winding Down Search for Non-U.S. Equity Managers

The San Diego City Employees’ Retirement System is narrowing the search for new managers in their Non-U.S. Equity lineup.

According to meeting materials, four emerging market equity managers were recommended with allocations split evenly between each, including Franklin Templeton, PGIM, Lazard, and Driehaus. The funding for these managers will be provided by the termination of current EME managers Abrdn and Neuberger Berman.

Also recommended at the meeting was the addition of Fidelity International Small Cap Equity strategy to the existing international small cap portfolio. This addition will complement existing managers AQR International Small Cap and Artisan Non-US SMID. 

Investment consultant, Aon, assisted with the searches.

The recommended portfolio would include:

• 40% Passive MSCI World ex-US Index (passive)
• 14% Brandes International Equity (existing manager but expanded to include EM)
• 14% William Blair International Leaders (existing manager)
• 4.5% AQR International Small Cap EAFE (existing manager)
• 4% Artisan International Small/Mid Cap (existing manager)
• 4.5% Fidelity Select International Small Cap (new manager)
• 4.8% PGIM Quant Solutions Emerging Markets All Cap Equity (new manager)
• 4.8% Lazard Emerging Markets Equity (new manager)
• 4.8% Driehaus Emerging Markets Growth (new manager)
• 4.8% Franklin Templeton Global Emerging Markets Equity (new manager)

As of March 2024, SDCERS allocates 13.5% to Non-U.S. Equity with a policy target of 12%.

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