Citibank today bought Harris Bank's large institutional master trust, master and global custody, and securities lending business for an undisclosed amount. The purchase doesn't include Harris' middle market, corporate and personal custody business. Harris is not disclosing the amount of custody assets affected by the sale. As of June 30, Harris had $104.7 billion in tax-exempt trust and custody, and Citibank had $195 billion, according to Pensions & Investments.
The sale will affect a search for a new trust and custody provider at the Illinois Teachers' Retirement System, Springfield. Executive Director Robert Daniels said system officials had narrowed it down to six finalists, including Harris and excluding Citibank.
Separately, Harris will expand its asset management business and will be adding some mutual funds. Harris also will work more closely with parent Bank of Montreal to try to expand the asset management business.
The $18.8 billion Los Angeles County Employees Retirement Association approved an RFI in a search for a domestic equity index fund manager. The questionnaire will be sent out today to Bankers Trust, the current index fund manager; BZW Barclays Global Investors; and State Street Bank. The fund is expected to put about $1.6 billion in an S&P 500 index fund and $96 million in a Russell 2000 value index fund. The search, part of a fund restructuring, is being done to re-evaluate the current index fund manager and evaluate the others.
The $500 million St. Paul (Minn.) Teachers' Retirement System pension fund is planning to almost double its international equity allocation, said Eugene R. Waschbusch, secretary and treasurer. He expects the pension board to decide by March whether to search for a small-cap international or emerging markets manager, or to boost the $30 million allocation to existing international manager Morgan Stanley Asset Management.
The board is authorized to invest up to 10% of assets, or $50 million, in international; the size of the new allocation hasn't beeb decided.
Canadian Press, Toronto, will separate its C$40 million (U.S. $29.6 million) pension fund into separate union and non-union plans, said Don H. Jarrett, vice president-finance and administration. The Canadian Media Guild doesn't have to approve the separation, but the company is negotiating with the union over related issues. He expects the plans to be divided this spring; then, the two existing money managers will be reviewed. Elliot & Page runs domestic stocks and bonds; McDonald Investment Management runs foreign equities.
The Dow Jones industrial average, which closed yesterday at 5032.94, will peak in the spring at 5800 and then fall to 4500 by the end of 1996, predicts Byron R. Wein, U.S. investment strategist at Morgan Stanley. The yield on long-term Treasury bonds, now about 6.1%, will rise above 7%, he said in a report to clients. Mr. Wein also predicts major Japanese banks will avoid a crisis and the Nikkei 225, which closed yesterday at 20,612.32, will rise to 28,000.
He said Europe's recession will continue, and the possibility of a single currency shortly after the year 2000 ``seems more reasonable.''
He said China will announce that it wants to bring Taiwan under Beijing's control before the end of the 1990s, destabilizing southeast Asian markets, and Boris Yeltsin will be forced from office and anarchy will overcome the frail political order in Russia. Mr. Wein also said Mexico will revive and its stocks again will become favorites of emerging market investors, bettering the returns available in southeast Asia.
The $94.7 million Brookline (Mass.) Retirement Board yesterday picked Guinness Flight as its first international equity manager, said William Wolf, director-retirement. Guinness Flight will manage $4.5 million to $5 million. Assets will come from the two balanced managers, State Street Research and Loomis Sayles, which manage virtually all of the board's assets. Watson Wyatt assisted.
American National Can Co., Chicago, hired Diversified Investment Advisors to manage an $11 million money purchase pension plan for its Longview, Texas, facility. Diversified will provide a fully bundled service, including investments in four Diversified collective trust funds, record keeping, communications and administration.
The former investment providers were LaSalle National Bank and Bankers Trust. The former record keeper/administrator was Metropolitan Life.
NANA Regional Corp., Kotzebue, Alaska, hired Regis Retirement Plan Services to provide fully bundled services for its three 401(k) plans, which have assets of less than $10 million, said CFO Shelby Stastny. Previously, the fund used Sirach Capital Management, an affiliate of Regis, for investments, and Kibble & Prentice for record keeping and administration.
Regis will provide nine investment options - including NANA's first international equity option and three lifecycle funds. Enhancements to the plan include daily valuation and transfers, and quarterly statements. Those services had been provided semiannually