LONDON - Schroder Unit Trusts, London, has outsourced investment administration to The WM Co., Edinburgh, for 35 retail and institutional unit trusts totaling more than 12 billion pounds ($20 billion).
Brian O'Sullivan, finance director of Schroder Unit Trusts, said in a release: "We are constantly looking at ways to enhance the level of service we give to our clients. Outsourcing our unit trust valuation and accounting processes to The WM Co. fulfills that objective and allows us to focus on our core business activities."
Cinven hires Lloyds
as buy-out fund custodian
LONDON - U.K. venture capital company Cinven Ltd. hired Lloyds Bank Securities Services as custodian for its new 300 million pounds ($500 million) U.K. buy-out fund.
The fund, which will invest in buy-outs valued at more than 10 million pounds, is Cinven's first since it was acquired in a management buy-out earlier this year. The fund will invest alongside Cinven's three other clients: the British Coal Pension Schemes, Railways Pension Schemes and Barclays Bank Pension Fund. Another client, Royal Life Insurance, now will invest through the fund.
its view of Mexico
SACRAMENTO, Calif. - The California Public Employees' Retirement System, Sacramento, with $100 billion in assets, has downgraded Mexico as an investment market, listing it as "category B," acceptable for only limited investment exposure.
The fund's active international portfolio managers cannot place more than 20% of their portfolio assets in total in category B countries. Mexico had been listed in the retirement system's "category A," a market considered appropriate for investment and where investment in the market is not constrained.
The change was made in part because several assassinations of key Mexican political figures and businessmen have challenged the Mexican government's ability to continue economic reforms, said Wilshire Associates, Santa Monica, Calif., in a report. Wilshire is CalPERS' consultant.
Unilever pension staff
LONDON - Angela Docherty joined Unilever PLC's corporate pensions department as internal investment consultant to its pension funds worldwide, with some $16 billion in total assets.
She replaces Wendy Mayall, who recently was named chief investment officer of Unilever's U.K. pension fund.
Ms. Docherty had been marketing director at Stamford Associates (UK) Ltd., an investment consulting firm.
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Nathan Gelber, Stamford's managing director, said there are no plans to replace Ms. Docherty. The firm has been adding its desired level of three or four clients a year and does not require an active marketing program, he said.
Merc signs trading pacts
with MATIF, LIFFE
CHICAGO - The Chicago Mercantile Exchange signed agreements with the London International Financial Futures and Options Exchange and the Marche a Terme International de France, Paris, to trade European interest rate contracts in the United States.
The agreement with LIFFE initially will allow the CME to trade Euromark contracts in LIFFE's off hours, and eventually LIFFE's other short-term short term rates, including "Euro" denominated contracts.
Likewise, the agreement with MATIF will allow the CME to trade MATIF's long term French bond contract, as well as other long-term contracts with sufficient volume.
The agreement doesn't include the trading of U.S. contracts in Europe.
In addition, the agreement doesn't affect an existing linkup between LIFFE and the Chicago Board of Trade, a LIFFE spokesman said. That agreement pertains to the two exchanges' long-term interest rate contracts, while this new agreement concerns LIFFE's short-term interest rate contracts, he said.
Leaders of the two European exchanges said the agreements are key to their respective strategies in dealing with the planned Economic and Monetary Union in Europe.
Pareto to open
office in Australia
SYDNEY, Australia - Pareto Partners is opening a Sydney office Jan. 1, headed by founding partner Margaret Waller.
Ms. Waller, who is returning to her Australian roots from London, will oversee the four-person office. James Coleman, who joined Pareto six months ago from Westpac Investment Management Ltd. in Sydney, will conduct research for the firm.
Pareto is one of a growing number of international money managers setting up shop in Australia, as the market has shifted toward specialist management in the past several years. The firm has A$2 billion ($1.63 billion) in assets under management in Australia, with another A$1 billion in commitments.
Institutional demand has centered on Pareto's well-known currency overlay product but strong interest also exists for the money manager's global asset allocation overlay, which was developed in Australia, said Ronald Layard-Liesching, partner.
Pareto plans to start marketing the global asset allocation product to U.S. investors starting early next year, he added.
Arisaig Partners raises
$68 million for new fund
SINGAPORE - Arisaig Partners, a new money management boutique in Singapore, raised $68 million for a small-capitalization Asian companies fund.
The open-end Arisaig Asian Small Companies Fund, which will be capped at $100 million, is listed on the Irish Stock Exchange.
Investors include major European insurance companies, pension funds and a private bank.
The fund will invest in small-cap, value-oriented stocks with a focus on Asian service companies.
"This universe is underresearched, underowned and consequently underrated," said James Alexandroff, one of three principals in the firm.
Arisaig was formed in August by Mr. Alexandroff, former director and senior vice president of LGT Asset Management; Torquil McAlpine, former head of Schroder Securities' Asian division; and Lindsay Cooper, head of regional smaller companies research for Crosby Securities.
Korean stocks attractive
to fund manager
LONDON - Korean stocks, battered by a slowdown in exports, slackening global demand for manufactured goods and a weakened yen, look cheap, according to officials of the new Atlantis Korea Fund Inc.
And Korean manufacturers are saddled with debt, just as new capacity is becoming available, fund officials said.
The open-end investment company will invest in equity, debt and related investments in Korea-listed and traded companies and is geared toward institutional investors.
Managed by Peter Irving, a founder of London-based Atlantis Investment Management and a former portfolio manager at Schroder Investment Management Ltd., the fund will emphasize stock picking.
Companies will be selected based on operating margins, market share, sales growth and balance sheet strength. Sector weighting will be determined through macroeconomic analysis and are not likely to follow the Korea Composite Index.
The manager favors stocks in non-manufacturing companies; certain manufacturing and techologies companies whose prices are depressed, such as Samsung Electronics and Korean Air; depressed construction companies; better managed banks that stand to benefit from financial deregulation, such as Shinhan Bank, Hana Bank and Korea Exchange Bank; and companies with specific niches, such as Medison, Sungmi Telecom and S One.
Abaco set joint venture
DES MOINES, Iowa - Principal International Inc., a member company of the Principal Financial Group, signed a letter of intent with Abaco Financial Group, Monterrey, Mexico, to form a joint venture to develop pension and life insurance business.
The agreement calls for Principal to acquire a minority ownership of Abaco and to form a strategic alliance to develop life insurance business with Abaco's bank, Confia, as well as other companies within the Abaco group.
The Principal-Abaco alliance also intends to participate in the private pension market created by Mexico's new pension law, which calls for specialized administration companies to manage assets for Mexican employees.
'97 to be challenging year
for global investors
NEW YORK - he U.S. stock market should post "blah" performance during the next 12 months, and is vulnerable to a 10% correction, said Nicholas Bratt, global equity group director of Scudder, Stevens & Clark.
Overseas, "some markets will do very well, while others will (fare) worse than the U.S.," creating a "challenging" year for finding the right investments, said Mr. Bratt.
Markets that performed well in the last six to nine months, such as Hong Kong, are "likely to be vulnerable" to a decline in the U.S. market, he maintained. In Europe, stock markets should decline less than in the United States "and might (even) go up,"he said. In Japan, individual stocks might fare well even though the overall market may not, he said.
For international portfolios, Scudder has approximately 50% in Europe, 20% in Japan, about 20% in the Pacific Basin excluding Japan, and about 10% in other emerging markets.
Capital International launched a standalone MSCI Russia Index, composed of 14 securities and with a market capitalization of $19.5 billion. The index covers approximately 50% of the market cap of Russia and, as a reflection of the market at large, it is dominated by large energy companies such as LUKoil, Surgutneftegaz and Gazprom, utility companies such as Unified Energy and telecommunications companies like Rostelecom.
Although now a standalone, the MSCI Russia Index will be considered in coming months for inclusion in the MSCI Emerging Markets Free Index. That would not occur before June.
From its inception on Jan. 1, 1995, through Nov. 20, 1996, the MSCI Russia Index gained 75.8%. This year through Nov. 20, it gained 144.2%.
Alliance to bring
new funds to Brazil
Salomon Brothers Asset Management and Banco Patrimonio, the Brazilian affiliate of Salomon Brothers, formed an alliance with Banco Bradesco to introduce a new family of mutual funds to Brazilian investors.
Called the Asset Manager Funds, the new vehicles will be available to Brazilian individual investors. Banco Patrimonio and Banco Bradesco will manage the funds, while Salomon Brother Asset Management will serve as adviser.
The asset allocation funds to be offered are divided into conservative, moderate and aggressive investment categories. Although allocations are expected to change over time, the most conservative version now has 60% invested in short-term Brazilian fixed-income securities, 20% in long-term Brazilian bonds, 10% in Brazilian equity and 10% in other investments.
The moderate-risk version has 50% in short-term fixed income securities, 25% in long-term fixed, 20% in Brazilian equity and 5% in other investments. The most aggressive of the three types has 40% in short-term fixed income, 25% in long-term fixed, 30% in equity and 5% in other investments.