No real-estate queueThe Nov. 1, page 2 article by Terry Williams on redemption requests on real estate funds, "Early bird earns reward," mentions that virtually all open-end commingled real estate funds have queues waiting for withdrawals. "Consultants could only recall one other besides CIGNA - Sentinel Real Estate - that doesn't."
The Principal Financial Group has an open-end commingled Real Estate Separate Account with $120 million of assets. It has been in existence since 1983 and has always met withdrawal requests as made by our customers without deferral.
Our real estate ownership fund is available to both defined benefit and defined contribution pension plans.
Dan. J. Fitzgerrell
Director Pension Services
The Principal Financial Group
Des Moines, Iowa
Redemptions, no waiting
In the Nov. 1 article "Early bird earns reward," I was disturbed to read the statement ".|.|. most consultants could only recall one other, a Sentinel Real Estate Corp. fund - that doesn't have a line of investors seeking return of capital."
MetLife's Tower Fund, a commingled, open-end real estate fund established in 1981, has net assets of $391 million, 31 income-producing properties and 67 pension funds participating.
The Tower Fund has never had investors waiting in a queue to exit.
The Tower Fund has always been responsive to the needs of our pension fund participants.
Over the years, the fund has been able to handle the few redemption requests received in a prompt, orderly manner.
In addition, the fund is ranked first in the Evaluation Associates Inc. open-end commingled universe over two-, three-, five- and 10-year periods as of Sept. 30.
John B. Kverland
Assistant vice president-pensions
Metropolitan Life Insurance Co.
I very much appreciate the mention given our firm in your Nov. 29 issue, in that the performance of our representative Global Convertible Bond account (of BAII Asset Management, Paris) placed it at the top of the one-year PIPER performance table of fixed-income global managers. (Table page 30 and story page 28.)
Nevertheless, I need to express my concern that such information has been published without reference to the fact that this firm is not a registered investment adviser under the Investment Advisors Act of 1940. I am therefore concerned that publication of such statistics without such a notation might be construed as business solicitation within the United States.
Clearly, we are pleased to see pointed out the superior results being reported by this firm; the significance of global convertible bonds as an alternative asset class; and the skills of a firm that has, for the time being, chosen not to register under the stringent U.S. legal framework.
I do, however, feel the need to make these points.
Banque Arabe et Internationale
Pay of AMR's Crandall
Regarding Graef Crystal's Sept. 20 article "Dark skies of AMR, UAL rain on execs, too": Mr. Crystal may have calculated Mr. Crandall's 1992 compensation at $1.01 million, but Mr. Crandall calculated it at $4.2 million, as reported to the IRS.
Are these additional monies not part of the entire compensation or part of what Mr. Crystal describes as "total direct compensation?"
If not, why not? Why isn't company stock sold by that company's CEO considered compensation? Is Mr. Crandall's self-control still worthy of celebration?
David A. Shapiro
Fort Worth, Texas
Editor's note: In a telephone conversation, Mr. Shapiro said he got his data from a Texas newspaper account and was unable to provide further details.
AIMR's Levels 1 and 2This is in response to a Nov. 29 letter by Ron Surz on AIMR performance presentation compliance.
The letter referred to the differences between a Level I and Level II verification of compliance with the AIMR Performance Presentation Standards.
Before an independent third-party can verify a manager's claim of compliance at Level II, a Level I verification must be completed firmwide.
Therefore, a Level II includes Level I, and is a step beyond.
Level I assures inclusiveness of portfolios in firmwide performance. Level II assures accuracy of the numbers and may be applied on a per composite basis.
Therefore, a Level II is the higher level of performance verification because it includes Level I.
Association for Investment
Management and Research
Missing equity fund
While we were pleased the Lord Abbett U.S. Government Securities Fund was listed in the one- and five-year fixed-income mutual fund performance rankings in tables on page 21 of the Nov. 15 issue, we were disappointed the Affiliated Fund was not included in the equity mutual fund rankings.
The Affliated Fund's total average returns for the one- and five-year periods ended Sept. 30, were 16.7% and 12.7%, respectively.
These performance numbers should have resulted in the inclusion of the Affiliated Fund in the equity rankings for both periods.
The Affiliated Fund was listed in your Aug. 9 special report, starting on page 17, as one of the equity mutual funds most used by defined contribution plans, and therefore, should be in your universe for performance rankings.
Anthony J. Russo Jr.
Director of Retirement Planning
Lord Abbett & Co.
Editor's note: Lord Abbett's fund was inadvertently left out of the mutual fund rankings.