The $18.8 billion Los Angeles County Employees Retirement Association might be searching for a high-yield bond money manager later this year. The pension fund is considering whether to send out an RFP or RFI, or whether to use an existing money manager. At stake is an estimated $790 million allocation, said CIO Kenneth Shaffer. Some of the assets would come from existing managers.
No timetable has been set, but a decision probably will come during the next few months.
Northrop Grumman Corp. has agreed to purchase the defense and electronic systems business of Westinghouse Electric Corp. for $3 billion in cash. Northrop will assume responsibility for nearly $600 million in unfunded pension and other post-retirement benefit liabilities associated with the Westinghouse defense operations. The sale is expected to close by March 31.
The $6.6 billion Massachusetts Pension Reserves Investment Trust, Boston, has invested $45 million in two private equity and venture capital limited partnership funds: CVC European Equity Partners, a European buy-out fund based in London, with a commitment of $25 million; and Willis Stein & Partners, a buy-out fund focusing on midsized companies in the Midwest, with $20 million.
Broad equity market gains in 1995 pushed the Russell 3000 Index, which measures the broad market, to record levels, returning 36.81%. The previous high was 33.7% in 1991.
Large-cap stocks were the big winners for 1995, posting record annual gains. The Russell 1000 Index, which measures large-cap stocks, returned 37.77% for the year; small-cap stocks measured by the Russell 2000 returned 28.44%.
Overall technology, health care and financial services stocks led both large- and small-cap stocks, according to Paul Greenwood, senior research analyst at Frank Russell. ``Among small-cap issues, the pronounced weakness of consumer stocks proved to be a major drag on relative performance,'' he said.
Switzerland was the top-performing equity market for U.S. investors in 1995, returning 42.4% in dollar terms, according to Morgan Stanley Capital International. Currency played a big role, as the Swiss franc increased 13.7% against the U.S. dollar. The U.S. stock market was second, rising 34.7%. A year-end rally pushed up returns in 20 of 22 countries in December. Overall, the MSCI World Index rose 18.7% last year, while the MSCI EAFE rose 9.4%.
Top developed-market performers for the fourth quarter were Switzerland (9.3%), Singapore (9.2%) and Spain (8.3%). Finland was the weakest performer during the fourth quarter, losing 29.3%.
Emerging markets, however, were disappointing, ending down 6.9% for the year, according to the MSCI Emerging Market Free Index. Strongest emerging-market returns for the year came from Peru (22.1%) and Israel (21.8%), while the weakest emerging market were in Pakistan (-38.2%), Sri Lanka (-32.7%) and India (-31.9%).
Wilshire Associates will open its first non-U.S. office in London to service Europe and South Africa sometime in 1996, said Stephen Nesbitt, senior vice president. The London office will provide traditional consulting services as well as Wilshire's investment technology software. Julia Bonafede, currently a vice president in the Santa Monica, Calif., headquarters, will head up the new office.
Sudberry Properties Inc., San Diego, Calif., hired Union Bank to provide investment management, record keeping and administration for its $190,000 401(k) plan. In addition to using five of Union Bank's Stepstone mutual funds, Sudberry will use Fidelity Overseas for international. Principal Financial Group had been the bundled provider.
Sterile Concepts Inc., Richmond, Va., hired Scudder Group Retirement Services to provide fully bundled services for a start-up 401(k) plan it will introduce Jan. 1. Three Scudder-managed investment options will be offered, in addition to a company stock option. The plan also will use Scudder's daily valued record-keeping system, trust and administrative services, and an automated voice-response system. Sterile Concepts' staff will work with Scudder to develop employee communications and educational materials, said Elissa Echer, director of human resources. Foster Higgins assisted.
Donald K. Peterson has been appointed executive vice president and CFO of the new systems and technology company to be formed as a result of AT&T's restructuring. He had been CFO of AT&T's communications services group.
An AT&T spokeswoman said Mr. Peterson's appointment is one of the last major steps before any decisions are made on how to allocate AT&T's roughly $40 billion in pension assets. A decision on how the assets will be divided among the three separate companies resulting from the AT&T restructuring should be made this year, she said