Investment advisers would be able to manage up to one-half of the assets of employee pension funds under major pension fund deregulation measures being contemplated by Japan. Current rules allow investment advisers to manage up to one-third of the assets.
Under the proposal, Japanese trust banks would have looser investment rules. And, the yield on insurance companies' general accounts would drop to 2.5% from the current guaranteed yield of 4.5% and perhaps be abolished altogether.
The changes could take effect April 1 - the start of the fiscal year - if approved by the Japanese government.
The C$125 million (U.S. $91.3 million) academic pension fund of Simon Fraser University, Burnaby, British Columbia, is considering an allocation to derivatives, said Alan Black, manager-pension and benefits. ``The trustees are looking at futures and options'' and other derivatives, he said. ``Not in a big way, probably looking at putting 2% or 3%'' of total assets in the area. ``They always have Orange County (Calif.) in the back of their minds. I would think this will be an ongoing discussion for the next two or three (monthly) meetings. I think they eventually will get into it. It's just getting the fence-sitters off the fence.'' Trustees are looking at using various futures and options and other derivatives under a number of strategies to gain returns.
Jury selection began today in New York Supreme Court in a lawsuit brought by Ron Ryan, a principal with Ryan Financial Strategies Group. Mr. Ryan, who developed the Ryan index, is suing the Japanese bank Sanwa, the largest bank in the world, and BGK Securities, which had been Ryan's parent company. BGK was sold to Sanwa Bank for $74 million. Mr. Ryan claims Sanwa and BGK conspired to deprive him of the proceeds from the sale by cutting out his division. Yet, according to a news release by Mr. Ryan's law firm, Sanwa and BGK claimed no part of the sale involved the purchase of the Ryan division and its financial systems.
As expected, the $535 million Marin County Employees' Retirement Association, San Rafael, Calif., has begun its search for a large-cap domestic value equities manager, said Norman Klein, retirement administrator. The fund is conducting the search with the help of Asset Strategy Consulting, without an RFP. It hopes to complete the search by the end of February.
The fund plans to allocate 22% of its total assets to the new specialty. Assets will come from a major restructuring.
California state Treasurer Matt Fong tomorrow will bring together officials of the state's largest corporate and public pension funds as well as corporate CFOs and other leaders in investment and finance for a summit on developing California as a financial center for the Pacific Rim. ``The ultimate goal of the financial summit will be to develop a plan to link the state's public and private pension funds with California corporations to facilitate investments in California and the Pacific Rim,'' Mr. Fong said in a news release. Among other actions, he wants a ``strategic initiative'' to ``encourage the state's pension and investment fund managers to make investments in California and the Pacific Rim that will result in an increase in jobs and an increase in the gross state product in California.''
Two employees terminated by the State of Wisconsin Investment Board, Madison, took administrative steps to allow them to sue the board.
Richard Gibson and Katherine Mack, who both worked managing the cash pooled fund that took $95 million in derivatives-linked losses last year, filed notices of claim with the state attorney general. The notice is a requirement to sue under state law, but not the first step of a lawsuit.
SEARCHES & HIRINGS
The $18 million San Angelo (Texas) Firemen's Relief and Retirement Fund hired Byrd Capital Market Advisers and Westwood Management to manage balanced portfolios of $6 million each. A fund spokeswoman said at least one manager was terminated, but she declined to release the name.
The $400 million pension fund of Northern Illinois Gas, Aurora, added $7.5 million to its allocation with the Dimensional Fund Advisors' 6-10 Small Company commingled fund, said Doug Ruschau, assistant treasurer. The assets came from Mitchell Hutchins Asset Management, which was terminated following the departure of executives managing the pension fund's small-cap allocation, Mr. Ruschau said. DFA now manages $30 million to $35 million in the 6-10 fund for NI Gas.