Alaska Permanent Fund
JUNEAU, Alaska - The $15.5 billion Alaska Permanent Fund Corp. hired Independence Investment Associates and Society Asset Management for small-capitalization value equities, said Jim Kelly, research and liaison officer.
The managers will be assigned $50 million each initially sometime before the end of the September, and eventually could receive up to $150 million. Funding will come from cash flow, he said.
Callan Associates assisted with the searches.
Charles Allmon Trust
BETHESDA, Md. - Shareholders of The Charles Allmon Trust Inc., a $125 million closed-end fund, approved the hiring of Liberty Asset Management to manage 20% of the fund using a manager-of-managers approach.
Liberty also will administer the entire fund.
Each will manage a third of the $25 million for which Liberty is responsible.
The remainder of the fund will continue to be managed by Charles Allmon.
The move to Liberty was made to provide a method of "potential succession" to Mr. Allmon, a spokeswoman said.
Baltimore County Employees
BALTIMORE - The $1 billion Baltimore County Employees' Retirement System hired two new fixed-income managers to run $37 million each: Morgan Grenfell Asset Management and Pacific Investment Management.
Robert Burros, investment debt administrator, said the fund terminated Harris Investment Management because of a change of key personnel.
California Public Employees
SACRAMENTO, Calif. - The $89 billion California Public Employees' Retirement System approved, subject to completion of due diligence work, an investment of $20 million in Inroads Capital Partners.
The partnership invests in women- and minority-owned venture capital businesses.
Federal Express Corp.
MEMPHIS, Tenn. - The $1.8 billion defined benefit plan for Federal Express Corp. increased by 50% an allocation to a Barra/MLM Index fund managed by Mount Lucas Management Corp., said Bill Gurner, manager of trust investments.
Plan executives had put the allocation in place last October as a means to profit from volatility in futures markets, according to Mr. Gurner.
"We are very pleased" with the results so far, he added.
Using futures, the fund attempts to replicate a long straddle options position, whereby price movement up or down beyond certain levels leads to profit.
While Mr. Gurner declined to provide dollar amounts, he said the allocation is a part of a futures strategy within the fund's alternative allocation, which accounts for 6% of assets. The fund has 85% of its futures strategies in the Barra/MLM Index, and 15% in active strategies managed by Mount Lucas, Mr. Gurner said.
CAMBRIDGE, Mass. - The $5 billion Harvard University endowment has allocated $50 million to Rosenberg Institutional Equity Management for a small-capitalization equity strategy. The allocation is Rosenberg's first acceptance of a small-capitalization benchmark. Rosenberg is a quantitative investment management firm that strives to add value relative to the client's designated benchmark.
Idaho Public Employee
BOISE - The $2.75 billion Idaho Public Employee Retirement System has terminated four managers, said Robert Maynard, chief investment officer.
The fund terminated Prudential Asia Fund Management and the fund transferred that approximately $50 million of international equities to TCW. The fund also terminated Sanford C. Bernstein as a fixed-income manager, and the roughly $200 million of assets managed by Bernstein went to global fixed managers Baring Asset Management and Fiduciary Trust Co. International.
While Bernstein's performance was "superb," explained Mr. Maynard, the firm did not have plans for global bond investment.
The fund also terminated, partly for underperformance, two unidentified U.S. equities managers, one that managed about $150 million and the other that had roughly "a couple hundred million dollars," said Mr. Maynard.
That money ultimately went to the fund's global equities accounts managed by Baring and Fiduciary.
BETHLEHEM, Pa. - The $340 million endowment of Lehigh University has hired two bond managers - Standish, Ayer & Wood and J.P. Morgan Investment Management - for accounts that are expected to be roughly $50 million each, said treasurer Denise Blew.
Although not exactly global in structure, the new portfolios will have some non-U.S. exposure.
The new managers replace two unidentified firms that were terminated, although not for performance reasons, according to Ms. Blew.
Instead, Lehigh was seeking managers who could provide greater investment diversification.
Los Angeles City
LOS ANGELES - The $4 billion Los Angeles City Employees' Retirement System is negotiating an incentive fee contract with Lincoln Capital Management to run an active intermediate core bond portfolio of about $200 million.
The proposed contract would allow Lincoln to earn up to 25 extra basis points for superior performance.
Magee Rehabilitation Hospital
PHILADELPHIA - Magee Rehabilitation Hospital has decided to retain its current custodian, Continental Bank, according to Stephen Carmine, senior vice president and chief financial officer.
The hospital sought bids from other banks following its hiring of three new investment managers recently, but decided that the banks' services and fees were "very comparable" to those of Continental, he said.
The hospital has $38.5 million in what it calls board-designated funds.
WASHINGTON - The $200 million defined benefit plan for MCI hired three equity managers.
Fidelity Investments will manage a large-cap growth portfolio; and Glickenhaus and The Boston Co. will manage large-cap value portfolios.
Assets came from the termination of a value and a growth manager, as well as cash flow.
LONDON - The 200 million-plus ($300 million) U.K. pension plan of NCR Corp. has hired Kemper Investment Management, London, to run a U.K. fixed-income account and Jupiter Tyndall Merlin, London, to run a U.K. equities portfolio.
Further details were not available at presstime.
William M. Mercer Ltd., London, was the consultant.
Pennsylvania State Employes
HARRISBURG, Pa. - Trustees for the $13.6 billion Pennsylvania State Employes' Retirement System voted to hire Mellon Equity Associates and Emerald Advisors to actively manage a portfolio of stocks of companies based in Pennsylvania.
Upon successful contract negotiations, Mellon will receive $40 million and Emerald will receive $20 million.
The assets will come from an $80 million passive portfolio, known as the Pennsylvania Index Fund, which was managed by Mellon.
A decision has not been made on what to do with the balance, said a fund official.
The board also voted to allocate $50 million for distressed mortgage investments to Trust Company of the West's Special Credits Fund VI, subject to successful contract negotiations.
The assets are part of the fund's earlier reallocation of its fixed-income portfolio.
San Diego County
SAN DIEGO - The $2.2 billion San Diego County Employees' Retirement Association hired Delaware International to run a price-driven, active MSCI EAFE portfolio, said Richard N. Rose, chief investment officer.
Delaware, which will be assigned $30 million, beat out other finalists Cseh International and Marathon-London.
No consultant was used.
Funding will come from reducing an international index fund run by Wells Fargo Nikko and by reducing domestic equity and fixed-income allocations.
San Francisco City and County
SAN FRANCISCO - The $6.2 billion San Francisco City and County Employees' Retirement System allocated $30 million to Hellman & Friedman Capital Partners III.
The partnership focuses on opportunistic investments where a significant return on capital is expected. It will invest in a variety of special situations, financial restructurings, re-capitalizations and leveraged buy-outs of public and private divisions of companies and undervalued companies, said Clare Murphy, chief executive officer for the San Francisco pension fund.
In another development, the fund repealed its restrictions on South African investments.
Because of previous fiduciary considerations, the number of companies that remained on the restricted list were far less than 5% of the companies on the S&P 500 list, according to Ms. Murphy.
University of San Francisco
SAN FRANCISCO - Making its first move to the area, the $60 million University of San Francisco hired the Common Fund to run $5 million in international equities, said Willard H. Nutting, vice president-business and finance.
In addition, it hired its first specialized domestic fixed-income manager, Wells Fargo Bank, which was assigned $6 million.
The endowment's fixed-income had been run as part of balanced portfolios by Dean Investment Associates and NWQ Investment Management, which were retained.
Funding came from new gifts.
BLUE BELL, Pa. - U.S. Healthcare Inc., Blue Bell, Pa., selected CoreStates Trust and Investment Group as trustee and record keeper for its recently established voluntary employees beneficiary association, which will help fund its post-retirement health care program.