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Calif. County Taps MoMs

The $1 billion Stanislaus County (Calif.) Employees Retirement Association has hired Capital Prospects and Legato Capital Management as managers of emerging managers. Capital Prospects will handle a $50 million small-cap value equity portfolio, which is currently invested in the iShares Russell 2000 Value Index Exchange Traded Fund. Legato will handle a $33.5 million small-cap growth portfolio, replacing Mazama Capital Management, which was terminated for performance reasons. For the year to date ending Oct. 31, Mazama’s small-cap portfolio returned -46.1%, compared with the Russell 2500 Growth Index at -37.25%. Brian Alfrey, chief operating officer, declined to comment.

Retirement Administrator Tom Watson said the board liked Capital Prospects’ experience in the industry and its skill in selecting managers. Legato was chosen for its history in the space and management skills. The firm also handles money for large clients, such as the California Public Employees Retirement System, Watson said. There were no other finalists in the search.

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