South Miami pension trustees split small-cap allocation 50/50 between Federated and MFS

At the Dec. 10 meeting of the South Miami Pension Plan Board of Trustees, members voted unanimously to reallocate the plan's small-cap sleeve, splitting the position 50% to a Federated product and 50% to MFS.

The board took the action after David Lee, the board's investment presenter, reviewed quarterly performance and manager options and told trustees the plan's long-duration profile could tolerate volatility if the board wanted active exposure. Lee said the small-cap sleeve represents roughly 10% of the portfolio — approximately $6,700,000, by his estimate — and recommended against over-diversifying into many managers because that would tend to replicate an index at higher cost. "If we're going to make an active bet, I think just 50, 50, the Federated and MFS," Lee said during the discussion.

A trustee moved to implement the split and the motion was seconded and approved by voice vote; the clerk confirmed the motion passed unanimously. The board instructed staff and the consultant to effect the transfers and to circulate trade documentation to trustees.

Why it matters: the change reassigns a concentrated small-cap allocation into two managers to reduce single-manager concentration while preserving active exposure. Trustees said they favored a balance of value and growth and accepted Lee's view that a long-horizon public pension can carry short-term volatility for potential long-term return.

What to expect next: staff will prepare the transfer paperwork and, per trustees' directions, return any implementation confirmations and an updated investment-policy draft for review at the next meeting.