Nederlandse Reassurantie Groep Holding N.V. is seeking to recover 375 million ($589 million) in damages and interest from three advisers on its 1990 purchase of Victory Reinsurance Co. Ltd. and related firms from Legal and General Group PLC.
NRG, Amsterdam, alleges Bacon & Woodrow and Ernst & Young failed to warn about shortfalls in Victory's reserves and Victory's failure to lay off risk adequately from its marine and aviation business. NRG also is alleging Swiss Bank Corp. failed to provide it with competent advice.
Bacon & Woodrow and officials denied the claims. Swiss Bank officials did not respond to press inquiries. The trial, which starts on Monday, is expected to run for at least six months.
Niss leaving Creditanstalt
Stephen D. Niss is resigning as managing director of Creditanstalt Global Asset Management, the U.S. money management subsidiary of Creditanstalt Bank.
Mr. Niss' departure becomes effective Jan. 25. He will not be replaced; L. Charles Bartz, director of marketing, will take over his relationships.
He said he has not decided where he will go, but that he is "talking to a few people."
Creditanstalt set up the U.S. firm in 1992 as a vehicle for acquiring minority stakes in money management firms. Mr. Niss said he worked out an arrangement to leave after officials of the parent company told him in December the Austrian bank wanted to hold off making more investments in U.S. money management firms.
Collins leaves Slocum
Luke M. Collins, who joined as one of its first key employees five years ago, is leaving Jeffrey Slocum & Associates Inc. at the End of March to help start another firm.
The new business, which he hopes will launch in June or July, will provide customized educational program in financial analysis, credit review and sales training.
Mr. Collins will not be replaced, but Slocum hired John Schweers as managing director, senior consultant and chief operating officer, a new position. Mr. Schweers was treasurer of Donaldson Co., one of Slocum's pension fund clients.
Funds not target: aide
House Republicans have no intention of pecking at the tax-favored status of pension funds to pay for tax cuts promised in their election manifesto, the Contract with America, said Frank Hampton, legislative director to Rep. Bill Archer, the new chairman of the House Ways and Means Committee. Instead, Republicans will seek cuts in government spending, Mr. Hampton told a group of pension consultants, lawyers and others employee benefit professionals in Washington.
Institutional arm spun off
Singer & Friedlander Investment Management Ltd., London, with more than 1 billion in assets, is spinning off its institutional business from its private client business. The new institutional arm, Singer & Friedlander International Asset Management Ltd., will start with about 200 billion ($314 million) in assets under management, mostly for U.K. clients.
Peter Dencik, deputy executive director of the 35 billion Danish kroner ($5.8 billion) PKA pension fund for health services workers, Copenhagen, will move to London to become chief executive of the new firm. He will not be replaced at PKA; Nina Movin, head of equities, is assuming his international investment responsibilities.
Michigan alters asset mix
The $24.7 billion State of Michigan Retirement Systems is increasing its allocation to passive domestic stocks, domestic bonds, passive international equities, real estate and alternative investments as part of its 1995 asset allocation strategy, said Barry Stevens, direMichigan Retirement Systems is increasing its allocation to passive domestic stocks, domestic bonds, passive international equities, real estate and alternative investments as part of its 1995 asset allocation strategy, said Barry Stevens, director-bureau of investments.
Passive domestic equity will be increased to 10% of total assets from 7.4%; passive international equity will increase to 5% from 3.6%; domestic fixed-income will increase to 30% from 28.8%; real estate will increase to 7% from 6.4%; and alternative investments will increase to 7% from 5.8%.
Cash will be reduced to 3% from 10.5%, said Mr. Stevens.
In alternative investments, the system already has increased its commitment to the Hicks Muse II limited partnership to $75 million from $50 million and doubled its direct investment in Chartwell Reinsurance to $4 million.
BT reclassifies contracts
Bankers Trust Co., New York, reclassified $423 million in leveraged derivatives contracts as receivables, placing some doubt on whether the counterparties in those transactions will have the ability to pay Bankers what is owed under the contracts.
Bankers already has charged off $72 million of that to its allowance for credit losses. About one half of the remaining reclassified derivatives contracts are related to transactions with Procter & Gamble, which last year, sued BT over derivatives transactions. The case is pending.
Painters fund revamps
Trustees of the $55 million Painters District Council No. 35 Pension Fund, Roslindale, Mass., revamped its asset allocation and manager roster.
The board approved putting 30% of assets in domestic stocks, and another 10% in domestic small-cap stocks, as well as 10% in international stocks. Trustees also approved putting 42.5% of assets in bonds, including a core domestic portfolio, high-yield bonds and international bonds, and 7.5% in real estate, said Sharon Saganey, fund administrator.
The fund previously had up to 60% in domestic stocks, up to 10% in international stocks, and up to 30% in bonds. The fund retained its existing managers: Lazard Freres Asset Management now will manage domestic small-cap and international equities and Harbor Capital Management will run domestic stocks. The pension fund evenly split its bond portfolio between Loomis Sayles and Van Kampen Merritt and split the real estate allocation between the AFL-CIO Housing & Building Trust and the Trust Fund Advisors J for Jobs program, Ms. Saganey said.
Segal Advisors assisted.
Foreign holdings boosted
During 1994, U.S. tax-exempt institutions' holdings in international/global investments grew 18.3% to $310 billion, according to InterSec Research Corp., Stamford, Conn.
At year-end 1994, U.S. tax-exempt institutions had $246 billion in international/global equity; $53 billion in international/global fixed income; and $11 billion in cross-border balanced accounts.
Equity allocations rise
Most U.S. pension funds are increasing domestic and international equity investments at the expense of fixed-income allocations, according to preliminary reports from the annual sponsors survey by Greenwich Associates.
Corporate funds increased their domestic equity to 49.5% last year from 46% of assets in 1993, and their international investments to 9.5% from 9%, while fixed income dropped to 21.1% from 26.4%.
Public funds decreased their domestic stock allocations to 40.1% from an average of 41.2% in 1993, but international investments jumped to 11.1% from 6.8% and fixed income dropped to 29.3% from 39.6%.
The trends are expected to continue through 1997.
Trust bank established
Wood, Struthers & Winthrop Management has formed a trust company, Winthrop Trust Co., as a wholly owned subsidiary. Guy S. Waltman, former executive vice president of Bessemer Trust Co., was named president of the new trust company and vice chairman of Wood, Struthers. Firm officials said they expect approval shortly from the New York State Banking Department to begin operations.
UAM sets up affiliate
United Asset Management has set up an affiliate to provide marketing and client services to its other affiliates serving defined benefit plans. The new affiliate, UAM Investment Services Inc., will be headed by John J. Cook, former chairman of CS First Boston Investment Management. Regis Retirement Plan Services Inc., New York, will continue to offer marketing and client service to UAM affiliates serving defined contribution plans.