The New Castle County Employees’ Pension Program, based in New Castle, Del., has opted to siphon a Madison Square Investors account in favor of Vanguard's index management.

Following manager interviews last month, the County pension fund Board decided to offer the New York Life Investment Management (NYLIM) subsidiary’s assets to the Valley Forge, Pa.-based firm, meeting minutes said.

The S&P 500 index manager presentations included Mellon Capital Management, State Street Global Advisors (SSgA) and Vanguard. Kevin Leonard, a senior consultant at NEPC, noted that the firm preferred “a co-mingled pooled fund which is structured for institutional investors,” which discards Mellon and SSgA,” the April 17 recap said.

Tammi Martin, pension and benefits administrator, said in minutes that she would notify Madison Square of the termination.

As IMMP reported previously, the pension board reassessed its equity relationships with Friess Associates and Madison Square Investors. On Feb. 20, Friess Associates, manager of Brandywine Funds and other institutional portfolios, was approved for termination following a motion from CFO Michael Coupe, meeting minutes said.

Anna Hamilton, acting chairperson, said Friess’s February firing is related to the consultant’s earlier recommendations and “that it is no way related to any of these allegations of improper trading, churning or any of these other things that have come up in this meeting.”

Additionally, at a Jan. 16 meeting, Madison Square was placed on manager watch by NEPC due to “significant changes that will affect the portfolio.” Also, presentations for the 2013 Assumptions and Actions included talks over large-cap and index investing, the minutes said.

On Jan. 25, Madison Square officially changed its name to Cornerstone Capital Management Holdings after New York Life’s acquisition through the subsidiary of a majority stake in Cornerstone Capital Management.

In April, the Board ultimately approved a 7% target allocation to passive management as per NEPC’s prior allocation.

According to listed NEPC action items, Vanguard will take the whole 9% allocation from Madison Square. Also, the Cambridge, Mass.-based firm will offer a recommendation on the 2.5% allocation that Friess held in mid-cap, the meeting summary said.

SSgA was previously utilized as a transition manager for the Friess account.

At press time, inquiries placed to New York Life seeking comment on the Cornerstone Capital termination were not immediately returned.

Currently, according to a 2012 audit, the pension plan had more than $372.9 million net assets and roughly $730,000 in liabilities. Its investments included $171.8 million to mutual funds, $101.7 million to common and preferred stock, $50.5 million to corporate obligations, $22.2 million to U.S. government and agencies, $10.5 million to asset-backed securities, $6 million to cash, $5.77 million to other investments and nearly $2.8 million to municipal obligations.

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