Reuters reports that Merrill Lynch has been dismissed as international fixed income manager by another high profile client and that CSFB has also lost out at the same client, who has axed the firm as a currency overlay manager due to 'philosophical differences'.
The California Public Employees' Retirement System (CalPERS), which has assets of around $133bn, has confirmed that Merrill was dismissed as the pension fund felt that staff changes at the firm had adversely impacted on its performance. CSFB was let go from its role in hedging around $1.4bn in assets against currency fluctuations over disagreements in investment strategy.
A spokesman for CalPERS said that Merrill would be welcome to reapply for the business in future and that the firm 'has the capability to do a good job once they have built their team back up'. Baring Asset Management, another fund manager the pension fund uses, looks to be safe for the time being after the firm was placed on a Watchlist for possible termination after a year. Four other firms have had their contracts renewed.
CalPERS dismissed Goldman Sachs as a domestic fund manager earlier this year for performance issues.