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Advisor recommends removing Diamond Hill and Conestoga; proposes Fidelity Mid Cap and two small‑cap managers
Summary
Adviser put Diamond Hill on terminate status and recommended eliminating Conestoga after prolonged underperformance and firm‑level red flags; replacement recommendation: Fidelity Mid Cap Index Fund plus two new small‑cap active managers (names as provided).
The adviser recommended removing two domestic equity managers from the pension lineup: Diamond Hill (moved quickly from maintain to terminate after an acquisition and internal staffing/research changes) and Conestoga (on watch several quarters due to underperformance and outflows). The Chair said these issues included an acquisition by First Eagle, reassignments of the portfolio manager, and research‑team restructuring at Diamond Hill — factors the adviser characterized as red flags.
To replace the managers, the adviser recommended a passive Fidelity Mid Cap Index Fund for the mid‑cap sleeve and two active small‑cap strategies (named in the transcript as Dreamhouse for small‑cap growth and Kimco RAE for small‑cap value). The adviser said the changes would increase diversification and lower the weighted average fee from roughly 0.45% to about 0.30% under the proposed target allocation; an initial trade of about 2.5% would correspond to roughly $450,000. Committee member Frank said the review should finish before any vote; the transcript did not record a formal motion or vote on these replacements.
