SWITZERLAND - The Canton of Zurich’s 13 billion euro pension fund has appointed Dimensional Fund Advisors to manage a 50 million dollar US equity small cap portfolio, ousting Montgomery Asset Management. The appointment marks Dimensional’s first European client since it began marketing in Europe six months ago.

Montgomery had been running the mandate for four to five years, but “due to a performance issue”, the canton decided to re-tender the mandate, says Daniel Gloor, head of asset management at Zurich.

“Dimensional was chosen as it has a different style, and its track record over the last ten years is impressive,” says Gloor.

Dimensional, headquartered in California, actively began marketing in Europe in May when it recruited David Salisbury, former chief executive of Schroders Plc, as head of its London office, and Philip Nash as director, from Barclays Global Investors.

Says Nash: “The appointment is very exciting for us, not only because Zurich’s fund is one of the most respected funds in Europe, but because it reflects the increased acceptance on the Continent, of quantitatively-based value added investment styles in asset classes like small cap and emerging markets.

“Going forward, winning such a mandate puts us in a good position with other large sized pension funds in countries like Switzerland, the Netherlands and Nordic regions.”

Dimensional, known for quantitatively based investment products, has 33 billion dollars in assets under management.