The $100 million Swedish Health Services of Seattle terminated Morgan Stanley from a $25 million small-cap core account, replacing it with Batterymarch Financial Management, according to an industry source familiar with the firm.
Mike Milavic, administrator for the plan, did not immediately return calls. Consultant Bill Wurts of Wurts & Associates declined to comment.
According to the source, Morgan Stanley had managed a small-cap core strategy account for the plan for several years, but the fund's performance was 'falling below the average' for quite some time.
Morgan Stanley spokesman Bret Gallaway declined to comment.
The source said Batterymarch was selected as the new manager because it best met the board's criteria, but would not speculate on what they were.
The manager's portfolio could increase in asset size to $50 million over the year, but it was unclear when that process would begin or where the source of funding would be drawn from. Dimensional Fund Advisors and Rice, Hall, James & Associates were said to be among the finalists.
