SEI broke off a pending deal for the sale of its SEI Capital Resources consulting division after four months of negotiations with the would-be buyer. Hank Greer, president and chief operating officer, said the potential buyer, whom he declined to identify, wanted to renegotiate several terms, including price, at the 11th hour of closing the deal. SunGard Data Systems was rumored to be in negotiations to buy SEI Capital Resources.
With the negotiations broken off, SEI announced it will make Capital Resources a completely separate company with its own board of directors, give it a new name and give key employees a ``substantial'' amount of its stock. SEI will continue to pursue efforts to sell the consulting division, including a spinoff of the shares to SEI shareholders, a management buy-out and seeking another firm to buy it.
SEI also is seeking a new chief executive officer for the consulting division to replace Charles Marsh, who quit last week with the impending breakdown of the sale negotiations. SEI plans to hire an executive recruiting firm to help with its search for a new CEO.
State Street Bank launched stand-alone software that permits integration and standardization of investment data. First designed to handle multicurrency and fixed-income securities, the system - called FolioExpert - can assist investors in equity and other asset classes. FolioExpert can convert security information into an industry-standard language, according to State Street officials. Customers would be portfolio managers, traders, analysts, mutual fund companies and other institutional investors.
Buck Consultants added Scudder, Stevens & Clark to its defined contribution plan alliance, 401(k) Connections. Buck's alliance now offers more than 350 mutual funds, GIC funds and commingled funds from 17 managers.
Payden & Rygel has introduced a mutual fund that aims to outperform the S&P 500 through the use of futures and bonds. The fund, modeled after an institutional separate account strategy, uses S&P 500 futures and an actively managed fixed-income portfolio.
A survey of professional investors by Sponsor-Software Systems found the average money manager foresees a 63% chance of economic growth in the United States this year, an 18.8% change of economic stagnation, a 10.2% chance of inflation and an 8% chance of a recession. Growth was defined as the Federal Reserve Board's index of industrial production rising faster than inflation.
Projecting out five years, respondents say there's a 57.2% chance of economic growth. Using those economic forecasts - combined with data on markets performance over 30 years - SSSI forecasts large stocks would return 8.4% this year; small stocks, 20.3%; foreign stocks 11.9%; and domestic bonds 18.7%. To achieve at least a 10% return, the optimal portfolio mix would be 43% in small-cap stocks, 6% in foreign stocks and 51% in domestic bonds, according to SSSI.
