SACRAMENTO, Calif. - The staff of the $48 billion California State Teachers' Retirement System is recommending the board update its real estate policy to incorporate private placements and land fund options. The recommendation followed a report from the fund's consultant, Institutional Property Consultants, on investing in land.
Approval is expected later this month.
STOCKHOLM, Sweden - The 550 billion Swedish krona ($71.5 billion) Allmanna Pensionfondsen is planning to invest up to 10% of its assets in non-Swedish bonds, said Carl John Aberg, managing director.
The giant pension fund, which covers all Swedish workers, plans to shift money gradually so it doesn't upset markets. It has a shortlist of external managers and plans to make its first steps in 1995. Mr. Aberg declined to say how much will be allocated initially. He added market conditions will dictate how long it takes to reach the full allocation.
Legal changes that became effective in 1990 permit Swedish pension funds to invest up to 10% of their assets in non-domestic bonds. The AP fund is 95% invested in Swedish bonds, 2% in domestic real estate and 3% in direct investments in local government and corporate obligations.
In addition, the fund is pursuing a strategy to diversify into non-Swedish real estate, primarily in Europe.
Swedish law permits pension funds to invest up to 5% of assets in domestic and foreign property.
LOUISVILLE, Ky. - Executives for the $132 million endowment fund of the University of Louisville Foundation are considering hiring managers for the endowment's first moves into small-cap and international equity and real estate, said Stewart Shrader, special assistant for investment management.
A decision could be made within the next few weeks, although nothing is definite, he said. Earlier, fund officials decided to increase diversification among equity styles and to increase the overall equity allocation.
The fund is looking at putting 10% of the fund in international, 3% in small cap, and 2% in real estate. The fund has a new allocation roughly split at 75% stocks and 25% fixed income, he said. The old split was 65/35.
Louisville's current equity managers are an "excellent group" for a core large-cap assignment, but endowment officials decided added diversity was need, Mr. Shrader said. Cambridge Associates assisted.
WASHINGTON - The $2.6 billion District of Columbia Retirement Board is looking for its first fiduciary consultant, which it hopes to select by early November, said executive director Jeanna Cullins.
The fiduciary consultant would make sure the board's investment and operational procedures are prudent, Ms. Cullins said. A City Council report suggested the board hire a fiduciary consultant to study these points.
OKLAHOMA CITY - The $665 million Oklahoma Police Pension and Retirement System terminated three managers - Alliance Capital, Munder Capital and Sunbank Capital - to make way for its fund realignment, said Robert Wallace, executive director. The combined $193 million will be reallocated.
About $31 million will go to global fixed income, $52 million to international equities, $70 million to large-cap domestic growth equities and $40 million to domestic midcap growth equities.
RFPs for managers have been received, and the board of trustees will shortlist managers in each category later this month; final manager selection will be in October.
GLOUCESTER, Mass. - The $24 million Gloucester Retirement System is embarking on an asset allocation study to determine whether to diversify, said Linda Geary, executive secretary of the board.
The fund's sole manager is Freedom Capital, which runs the money in a balanced portfolio.
CHICAGO - Continental Bank's investment management subsidiary will remain independent now that the merger between Continental and Bank of America is complete.
The Chicago-based investment management unit, renamed Bank of America Investment Advisors, will report directly to William M. Goodyear, vice chairman and future chairman and chief executive of the newly named parent, Bank of America Illinois. The unit also will take over management of the bank's cash management division from Continental's master trust area.
Assets managed by the division, including cash management, are about $15 billion, said Annette Calderwood, director of consultant development.
Towers Perrin has entered into an agreement with The Alexander Forbes Group, Johannesburg, South Africa, to provide Towers Perrin clients with access to consulting services in South Africa and neighboring countries.
John Lynch, Towers Perrin's chairman, said many of the firm's clients "are considering entry into or expansion in South Africa."
COLUMBUS, Ohio - Growth stocks will outperform value stocks through the end of 1994, according to Richard Wolf, president and chief investment manager for First of America Investment, which manages the Parkstone family of 16 mutual funds with $4.7 billion.
He contends growth stocks, non-cyclicals in which earnings are accelerating at a double-digit pace, tend to do better when the economy slows. Mr. Wolf predicts the GDP will slide below 3% heading into 1995 - after hitting nearly 4% in the first half of 1994.
What's more, he said, long-term Treasury bond rates are settling down around 7.5%, a positive sign for growth stocks. He predicts money managers will bid up growth stocks as they look ahead to 1995 performance.
WASHINGTON - The Labor Department's Pension and Welfare Benefits Administration will survey 30,000 retirees and workers age 40 and older to track changes in pension and health benefit levels. Richard Hinz, director of research for the PWBA, expects the surveys back early next year. The study will supplement the Census Bureau's Current Population Survey, and will update the 1989 figures covering this area.
CHICAGO - Kemper Securities rebalanced the asset allocation in all of its portfolios to reduce U.S. equity exposure by 5% and increased its cash allocations by the same amount. The reason: the recent runup in the U.S. equity market.
In the balanced portfolio, stock was cut to 50%, and cash increased to 20%. In the aggressive portfolio, stock was reduced to 60% and cash raised to 15%. The global portfolio saw U.S. stock exposure drop to 40%; cash now is 5%.
HOUSTON - An affiliate of real estate developer Hines Interests will enter the financial services business, serving as adviser to a new mutual fund that will invest in real estate investment trusts.
Hines Interests Realty Advisers L.P. will be the adviser to the American Capital Real Estate Securities Fund. It will evaluate the properties owned by the REITs purchased by the mutual fund.
NEW YORK - Bankers Trust plans to launch a commingled emerging markets fund, said Maria-Elena Carrion, head of the Latin American equity group.
The bank already runs two Latin American equity mutual funds, as well as an emerging markets mutual fund that is an option for a variable annuity.
The commingled fund will be for tax-exempt fund clients and mirror the insurance fund.
