The San Diego County Employees Retirement Association’s voted 5-4 against terminating their outsourced chief investment officer Lee Partridge and his firm, Salient Partners, at its Oct. 2 meeting.

The vote on SDCERA’s contract that pays Salient about $10 million annually came in the wake of several trustees questioning the safety of Salient’s investment strategy. The fund has adopted strategies that downplay investing in stock, and instead, employ the use of derivatives and leveraging or borrowing against existing assets to boost returns and protect the fund in down markets.

Partridge said theoretically, the strategy put the entire $10 billion fund’s assets at risk, as well as another $10 billion that could be leveraged.

The fund serves the county’s 37,000 active and retired members.

Advocates of cutting ties with Salient led by Supervisor Dianne Jacob said Salient’s strategy was far too risky and wasn’t worth it, given annual returns that lagged what other public pension funds achieved over the same time period.

“I feel very strongly that we need to change who is managing our money,” Jacob said. “I’ve lost trust (with Partridge) and if you don’t have trust, you have nothing.”

Jacob and others charged that Salient’s compensation was excessive, especially when measured against the returns of other pension funds, particularly those of the city employees’ fund.

Supporters on the board said Salient’s returns since it took over managing it in 2010 exceeded the fund’s targeted annual rate of 7.75 percent, and that the firm’s fees were fully-disclosed months ago. Some also worried if Salient was terminated who would manage the fund and what the new costs would be.

By terminating Salient, the board would be liable to a breach of its fiduciary duty, said Trustee David Myers.

Although Salient remained on the job, some trustees said they were intent on changing both the fund’s strategy and its manager down the road.

In response to concerns on the leveraged position of the fund, the board directed Salient to reduce the portion last week, an action that resulted in the savings of $8.8 million on that particular day.

The board’s hired consultant called the result “sheer luck,” after Jacob pointed out the action.

“Call it luck, whatever you want, it worked for us,” she said.