LONDON - The London Pensions Fund Authority hired Chase Manhattan Bank as sole global custodian for its (pounds) 1.8 billion ($2.82 billion) securities portfolio, said Martin Campbell, director of resources at the (pounds) 2 billion fund.
Chase already had been custodian for the fund's overseas investments, valued at (pounds) 180 million. Custody and settlement for domestic securities previously had been handled internally. As a result of a review, custody was consolidated with Chase, and four employees were laid off, Mr. Campbell said.
LONDON - The (pounds) 1.4 billion ($2.23 billion) Zeneca Ltd. pension fund hired a new real estate manager and global custodian, said Ray Martin, head of group retirement benefits.
Zeneca trustees selected Jones Lang Wootton Fund Management to take over a (pounds) 100 million property portfolio, Chase Manhattan Bank N.A. is the fund's global custodian.
The hirings complete the segregation of Zeneca's pension assets from ICI Investment Management Ltd., London, which previously managed the entire fund. Zeneca, a pharmaceuticals firm, was spun off from ICI's parent, Imperial Chemicals Industries PLC, in 1993.
In December, Zeneca trustees allocated (pounds) 400 million each to Schroders Investment Management and Mercury Asset Management to run U.K. balanced portfolios, while handing out 375 million to J.P. Morgan Investment Management Inc. for a global equities mandate and (pounds) 125 million to PDFM Ltd. in an aggressive U.K. stock mandate.
Watsons Investment Consultancy, Reigate, England, was the consultant.
LONDON - PosTel Investment Management Ltd. has restructured its European equities holdings, effectively swapping mandates with outside manager Schroder Investment Management Ltd.
PosTel, which manages (pounds) 25 billion ($39.8 billion) for the Post Office and British Telecommunications pension funds, more than doubled its continental European equity allocation in 1993.
Given PosTel's size, this sharp increase in allocation caused problems for Schroders, which was charged with an actively managed, higher-risk European stock mandate.
Because of the large infusion of cash it was receiving from PosTel, Schroders effectively was forced into a lower-risk core-type strategy.
Meanwhile, PosTel was running a higher-risk European equities portfolio - the opposite of its normal core index and lower-risk mandates.
The trustees decided to switch the portfolios last October, giving Schroders the higher-risk portfolio while creating an index core plus what PosTel calls a "net zero" portfolio, a type of market-neutral portfolio that takes both long and short positions.
PosTel Chief Executive Alastair Ross Goobey declined to disclose the size of any of the mandates. As of March 30, 1994, Schroders ran (pounds) 2.2 billion in European equities for PosTel, while (pounds) 374 million was managed internally, almost all in the core strategy.
The switch also involved a $870 million program trade, which was handled by Morgan Stanley & International Ltd., London, late last year.
Morgan Stanley acted as a principal on the transaction.
LONDON - Primary Capital Ltd., a new venture capital company, is seeking to raise (pounds) 65 million ($103 million) for its first U.K. buy-out fund.
Following the U.S. model, Primary is one of the few unaffiliated venture capital firms in the United Kingdom.
This independence avoids conflicts of interests, offers greater incentives for the investment team, and provides a greater entrepreneurial spirit, said Charles Gonszor, one of the firm's two partners.
Mr. Gonszor previously was head of Citicorp Venture Capital's buy-out division and a senior partner at Phildrew Ventures. David Hutchings, formerly deputy managing director of Montagu Private Equity, is the other partner.
The firms all are based in London.
The fund is designed to invest primarily in managed buy-outs and buy-ins of U.K.-based companies valued between (pounds) 5 million and (pounds) 100 million, although it also has discretion to pursue deals on the Continent and with earlier stage firms.
Primary will target U.S., U.K., and continental European institutional investors initially, although it may later market to Middle Eastern and Far Eastern investors.
A first closing will occur when commitments reach about (pounds) 25 million. A second closing will occur no later than June 30, 1996. Mr. Gonszor said the firm could handle twice the target size if the response is strong.
LONDON - Legal & General Investment Management officials believe the U.K. stock market will rise nearly 13% by the end of 1995.
The firm's investment experts believe the Financial Times-Stock Exchange 100 Index will reach 3450 within the next 12 months. Last year's 9.6% stock market decline was driven by highly leveraged players, such as hedge funds, proprietary traders and others, who were hard hit by the unexpected bear market in bonds, L&G officials say.
In contrast, previous market drops were preceded by sharp rises in inflation.
The outlook for continued low inflation has led L&G strategy director David Shaw to compare the 4% dividend yield for U.K. stocks with the retail price inflation rate - instead of the more typical bond yield. The inflation rate leads dividend yields by nine months, he said. As long as the inflation rate stays below 4%, a dividend yield between 3% and 4% will provide fair value, meaning stocks are cheap at present. Adding the 4% yield with an expected dividend growth rate of 9% suggests the FT-SE should reach 3450 this year.
LONDON - European property markets are starting to recover as Europe emerges from its recession, according to a report by Jones Lang Wootton, London.
While the market for office space in the second half of 1994 was spotty, the real estate adviser reports signs of an upturn in the Benelux countries and in Madrid and Barcelona, which had experienced sharp declines in values. London also is seeing a modest recovery in prime rents.
Retail sector markets, in comparison, are quite buoyant.
Facing disappointing returns from the office sector, investors have turned to shopping centers across Europe, especially in France, JLW found.
Cross-border activity continues. German open-end funds have remained very active in the U.K. and Dutch office markets, while Dutch institutions have been seeking shopping centers in France, Germany and the U.K.
Institutional Shareholder Services Inc., Bethesda, Md., formed yet another strategic alliance overseas, this time with Franklin Global Investors Services, Paris, the French shareholder advisory firm.
Under the agreement, Franklin Global, a new consulting firm headed by Sophie L'Helias, will provide in-depth research and consulting services on corporate governance issues in France to ISS clients. Ms. L'Helias' firm also will occasionally vote shareholder ballots in French companies for ISS clients.
In return, ISS will give Franklin access to its research and databases and promote Franklin's services to its clients, said Howard D. Sherman, ISS senior vice president and director of global services. Corporate governance issues are especially important in France as the country undertakes to privatize key public-sector corporations, he said.
OSLO, Norway - Norwegian pension regulators say domestic pension funds can hire non-Norwegian money managers.
While Norway has permitted the $6 billion pension market to invest up to 20% of assets in overseas stocks since July 1, 1993, few have done so.
In part, some pension executives have been awaiting guidance on hiring foreign-based managers.
Now, regulators say pension funds can hire life insurers or managers licensed to manage money in the European Economic Area - the 15 nations of the European Union plus Norway, Iceland and Liechtenstein.
While that might at first seem to pose a problem for U.S.-based managers, it won't be as long as they also are licensed to do business in Europe, confirmed Pierre Simonsen, deputy directory of Norway's Banking, Insurance and Securities Commission.
Written guidance detailing what protections must be taken will be issued by July, he said.
BURLINGTON, Vt. - Bennett Capital Management, Burlington, launched Windham Partners, a partnership investing in the emerging markets of Europe, the Middle East and Africa.
Bennett also will offer separate accounts for investing in the developing markets of those areas, said Peter Bennett, founder and senior portfolio manager.
Mr. Bennett selected these areas believing that they will produce high market returns in coming years, as Latin America and Asia have done already.
OTTAWA, Canada - A new survey finds Canadian pension funds are interested in real estate, despite a market that has had its share of problems during the past few years.
The survey, conducted by Sullivan & McGuire Real Estate Investment Counselors, concluded more than half of the funds either plan to invest in real estate in the next year or would consider an exceptional opportunity in the sector. Shopping centers are the preferred property type, according to the survey.
Baring Securities has added new emerging markets indexes and extend its current index. Baring's extended version of its current index - now containing 19 emerging markets and 400 stocks - includes 580 stocks in these markets.
In addition, Baring introduced a convertible bond index for eight Asian markets, including Hong Kong. The index is composed of about 70 convertible bond issues.