US - California pension giant CalPERS is considering terminating State Street Global Advisors from a $13bn (€10.2bn) international equity index mandate.
"Staff recommends bringing the remainder of CalPERS' international equity index assets under internal management," says an item on the agenda for the California Public Employees Retirement System's investment committee for August 14.
It has already taken some $13bn internally - which has resulted in management fee cost savings of around $1.3bn annually and value added portfolio returns of ¢43m. The new portfolio would be worth $26bn.
It was stressed that the mooted termination was not due to poor performance. "SSGA's management of the CalPERS international equity index mandate has met all objectives, with performance exceeding the benchmark," the document states. "CalPERS expects to maintain a strong relationship with SSGA and retain various mandates with them."
CalPERS has hired a number of key staff to assists its global equity investment programme, including people from SSGA itself and Barclays Global Investors, the note states.
"There are numerous reasons to internalise the remainder of CalPERS' international equity index assets, including cost savings, portfolio performance, and consistency," the item adds.
"We've been aware for quite some time of CalPERS' plans to bring the management of this fund in-house," said a State Street spokeswoman.
"We currently manage several investment strategies for CalPERS as part of long-standing relationship of more than 15 years.
"As an institutional investment manager that is known for client service, flexibility and quality investment strategies, we look forward to serving CalPERS' future needs as they evolve."