REGINA, Saskatchewan - The $400 million (U.S. $285 million) city employees and police pension funds in Regina want to more than double their real estate equity and direct mortgage investments, said Betty-Jane Thomas, manager-investments.
The funds want to raise their 2% in real estate equity to 5% to 7%; they would like to increase their 4% in direct commercial and residential mortgages to 10%.
She said they are searching for a manager that can invest in both real estate equity and direct mortgages. The funds now manage their real estate and mortgage portfolios in-house.
Assets will come from reducing Canadian balanced portfolios.
SAN DIEGO - The advisory committee to the $3.3 billion San Diego County treasurer's investment pool hired Metropolitan West, a money manager, to review the pool's portfolio and review investment guidelines for the pool.
The pool recently had about 25% of its assets in derivatives, including inverse floaters.
The Orange County bankruptcy crisis has made some investors in the San Diego pool - which includes cities and school districts - uncomfortable. The $2 billion San Diego County Employees' Retirement Association has about $450 million in the pool.
TORONTO - A restructuring plan for Cadillac Fairview Inc. includes involvement by two pension funds.
The plan will inject C$1 billion (U.S. $710 million) into the bankrupt property company. Among the rescuers are the Ontario Teachers Pension Board, its partner the Blackstone Group and the California Public Employees' Retirement System.
A limited partnership managed by Blackstone and Ontario Teachers will invest C$312 million and will own 31.1% of the company; C$200 million will come from a rights offering made to holders of Cadillac Fairview's existing subordinate debentures, of which the California Employees' is one. These investors collectively will own 19.9% of the company, on top of the 16.5% they will receive as part of the restructuring.
Blackstone and Ontario Teachers will pay C$188 million to Cadillac Fairview for a 75% interest in two Canadian malls; C$300 million will be raised from a new secured credit facility. Holders of syndicated debt who convert to equity will have a 32.5% stake in the company. The capital will be used to repay C$200 million of maturing property debt; C$50 million will go for restructuring costs; and the balance will be used to repay creditors with majority going to syndicated debt holders.
NEW YORK - San Francisco City and County Employees' Retirement System, State of Michigan Retirement Systems, Pennsylvania State Employes' Retirement System and the Washington State Investment Board are among the investors in Sprout Capital VII.
The Sprout Group's latest venture capital fund raised $250 million, of which more than 75% came from existing Sprout investors.
Richard Kroon, managing partner, said Sprout will make initial investments of approximately $3 million in start-ups and will provide expansion and equity capital up to $30 million to $35 million in high-growth, restructuring and buy-out opportunities. It will invest in health care, information technology, retailing and business service companies.
ST.-LAURENT, Quebec - Canadian Marconi Co. is doing its first major review of its four specialty managers since hiring them more than four years ago, said Marcia McKenzie, secretary and treasurer.
"One of the managers we're particularly displeased with" because of performance, she said, identifying it only as a Canadian bond manager. The managers run some portfolios for both the C$105 million (U.S. $75 million) employee-directed defined contribution plan and the defined benefit plan, whose size wasn't immediately available. The fund is working with SEI and Mercer on the evaluation, which it expects to complete by early summer.
Managers are Sun Life Investment Management, Elliott & Page, Knight Bain Seath & Holbrook, and Fleming Canada Partners.
NEW YORK - Goldman Sachs analysts have altered their recommended asset allocation to reflect rising interest rates and weakness in the stock market.
Meanwhile, David Shulman, Salomon Brothers' chief equity analyst, is taking a contrarian view of the stock market, and expects the market will move lower.
Goldman's recommended allocation for balanced accounts cuts equities to 60% from 70%, increases bonds to 30% from 25% and hikes cash to 5% from zero.
Mr. Shulman is maintaining his recommended asset allocation of 45% stocks, 30% bonds and 25% cash, but recommends selling technology stocks, avoiding utilities and underweighting consumer cyclicals.