Table of Contents

Issue Date: Monday, May 12, 2014

News

States pushing to offer retirement accounts to private sector

States pushing to offer retirement accounts to private sector

Expanding the public retirement system to the private sector moved to political reality from abstract concept this year, as 16 states either are considering legislation or taking the first steps toward implementing new approaches.

CalPERS chopping hedge fund allocation

CalPERS chopping hedge fund allocation

CalPERS portfolio managers have begun cutting the system's $5.3 billion hedge fund allocation in half, signaling a shift away from the asset class for the nation's largest defined benefit plan, say multiple sources familiar with the pension plan's operations.

Ukraine crisis begins to hit pension coffers

Ukraine crisis begins to hit pension coffers

Pension fund executives across the globe are turning a serious eye to the crisis that is rumbling on in Eastern Europe, as its effect on investment performance starts to hit home.

Investment managers report lackluster quarter

Investment managers report lackluster quarter

Publicly traded money managers saw rather anemic gains in assets under management for the quarter ended March 31, due in part to defined benefit plans playing a smaller role in the institutional investment industry and also because equity markets saw only slight growth.

South Carolina embarks on major overhaul

South Carolina embarks on major overhaul

The South Carolina Retirement System Investment Commission should rehab governance and investment processes to better manage the state's $29.9 billion in retirement assets, a fiduciary performance audit found.

European pension execs uneasy over transaction tax outlook

European pension execs uneasy over transaction tax outlook

Pension funds in Europe remain in limbo over the potentially damaging effects that a European financial transaction tax could have on their investments and participants' savings.

Macquarie, Fidelity pushing into transition business

Macquarie, Fidelity pushing into transition business

While four transition management providers have left the business in the last year, two big-name financial firms are making a go at it with U.S. defined benefit plans.

Small cap continues to ride high for year, but market changing

Small cap continues to ride high for year, but market changing

Small-cap growth stocks dominated the list of best-performing domestic equity strategies for the year ended March 31, according to Morningstar Inc.'s separate account/collective investment trust database.

The real world: U.S. real estate performance

The real world: U.S. real estate performance

How U.S. real estate has performed during the five years through March 31, 2014, according to the NCREIF Property index.

High-yield strategies showing no sign of giving up dominance

High-yield strategies showing no sign of giving up dominance

High-yield strategies dominated the list of top-performing fixed-income managers for the year ended March 31, according to Morningstar Inc.'s separate account/collective trust database.

Debt may ease private equity losses for Energy Future Holdings investors

Debt may ease private equity losses for Energy Future Holdings investors

Institutional investors that put money into Energy Future Holdings debt are finding those investments could help dull the pain of their substantial private equity losses in the failed energy company.

Ontario mandatory supplemental plan won't start anytime soon

Ontario's proposal for a mandatory provincial defined benefit plan to supplement the Canada Pension Plan is a long way from being put in place.

Funded status of corporate plans declines in April, 4 reports find

The funding ratios for U.S. corporate plans dipped in April, according to recent reports from Wilshire Consulting, BNY Mellon Investment Management, Milliman and Mercer. All four cited rising liabilities and modest asset returns as the reasons for the drops, which ranged from 0.6 to 1.1 percentage points.

No slowdown expected in record-keeper M&A

No slowdown expected in record-keeper M&A

High-profile acquisitions and mergers among record keepers will continue as the firms cope with pressure for lower fees and more services in a low-margin business.

Potholes litter road to ETF investment by DC plans

With the very public launch of an ETF-only 401(k) plan option by Charles Schwab Corp., might some defined contribution plan executives finally be willing to give exchange-traded funds a try?

Assets, revenue continue to increase at custody banks

Assets, revenue continue to increase at custody banks

Large publicly traded banks' assets under custody and administration continued their slow but steady climb through 2013 into the first quarter of this year, and their asset servicing revenue saw similar percentage gains.

Becker legacy found in DC target-date modeling

Becker legacy found in DC target-date modeling

Gary Becker, recipient of the 1992 Nobel Memorial Prize in Economic Sciences, left behind a human-behavior approach to the study of economics, including a principle used to model target-date funds and defined contribution plan glidepaths.

WEB EXTRA: CalPERS files amicus brief in Detroit bankruptcy ruling appeal

WEB EXTRA: CalPERS files amicus brief in Detroit bankruptcy ruling appeal

CalPERS filed an amicus brief in the 6th U.S. Circuit Court of Appeals in Cincinnati regarding the city of Detroit's bankruptcy case.

WEB EXTRA: Ruling on IBM’s U.K. pension plan changes puts pressure on ‘Imperial duties’

WEB EXTRA: Ruling on IBM’s U.K. pension plan changes puts pressure on ‘Imperial duties’

Employers considering making significant changes to their U.K. defined benefit pension funds must take care not to breach their “Imperial duties” – that is, acting in good faith, according to lawyers in the U.K.

WEB EXTRA: Milken discussions range from direct investment to sports teams

WEB EXTRA: Milken discussions range from direct investment to sports teams

Institutional investors at the Milken Institute Global Conference in Beverly Hills, Calif., were investigating new ways of investing that would provide risk-adjusted returns.

Registration deadline nearing for Best Places to Work

Registration deadline nearing for Best Places to Work

Registration for Pensions & Investments" third annual Best Places to Work in Money Management closes May 16.

Major record-keeper M&A deals since the beginning of 2013

nGreat-West Financial, Greenwood Village, Colo., in April announced it had agreed to buy the large-plan institutional defined contribution business of J.P. Morgan Asset Management, New York. The deal is expected to close during the third quarter. The combined record-keeping business will have $387 billion in assets under administration for 6.

Vanguard expands with a different approach

(updated with correction)

Kilroy joins P&I as online reporter

Meaghan Kilroy has joined Pensions & Investments as an online reporter in the Chicago office, writing primarily for P&I Daily. Ms. Kilroy previously was a reporter intern for The West Roxbury and Roslindale Transcripts based in Needham, Mass., and The Kane County Chronicle in St. Charles, Ill.

Special Report

Top-performing money managers: Q1 2014

Small-cap stocks and high-yield debt remain at the top another quarter.

Online

Frontlines

Editorial

Winning over proxy voters

Winning over proxy voters

The Coca-Cola Co. equity compensation plan for executives won the approval of 83% of the shares voted at its recent annual meeting, but left the company with an ambiguous mandate. Some major institutional investors that supported the plan might have reconsidered had they known other pension funds opposed it and known Warren Buffet thought the plan was “quite excessive.”

Industry Voices

The efficient market hypothesis is our North Star

The efficient market hypothesis is our North Star

Cliff Asness, writing in Industry Voices, calls the efficient market hypothesis the investment management industry's North Star.

Department: Portfolio Management

Never Satisfied

Never Satisfied

Manulife Asset Management's global multi-sector Strategic Fixed Income Strategy generates strong, consistent returns by investing in global government and corporate bonds, foreign exchange, and other fixed income instruments. Portfolio Manager Dan Janis explains how he scours multiple sectors, countries and currencies around the world to add value and reduce risk.

People Moves