Texaco Inc. will assign minority- or woman-owned money managers $186 million from its $1.431 billion pension fund. With WR Lazard already managing $31 million, that's $155 million to go to the new managers. Wilshire Associates will assist in the searches. The move stems from Texaco's earlier settlement of a racial discrimination suit.
CalPERS-ADB deal set
CalPERS announced it will invest $225 million in private equity investments in Asian-Pacific emerging markets through a joint venture with the Asian Development Bank, Manila.
The planned long-term investments stem from a partnership agreement between CalPERS and ADB. The investments are expected to finance a variety of ventures, including industry and financial services in the region. They could take the form of corporate acquisitions, management buy-outs, corporate growth and expansion financing as well as joint ventures and partnerships with local investors.
Separately, Bob L. Boldt was named senior investment officer for public market investments at CalPERS. He is responsible for implementing and managing strategy and policy for the system's $94 billion in publicly traded fixed-income and equity investments worldwide. Mr. Boldt had been a senior investment officer at Fisher Investments, where his duties were assumed by others.
Continental cuts 2
Continental Airlines terminated John A. Levin & Co. and Geewax, Terker & Co. as managers of its $519 million defined benefit plan following an asset liability study earlier this year by DeMarche Associates.
John C. Morris, managing director of treasury operations, said the two managers were terminated because the plan was overweighted in core value equities. The managers handled a total of $65 million.
Geewax Terker was replaced by Turner Investment Partners, which will manage $15 million in small-cap growth equities. John A. Levin was replaced by Fidelity Investments, which will manage $43 million in its Select Equity Market Index fund.
The remaining assets will be given to existing core equity manager Brandywine Asset Management.
Also, the fund allocated $5 million to a venture capital partnership with Brookside Capital.
Oregon shifts assets
The Oregon Public Employes' Retirement System put $400 million to work in small-cap growth equities, opportunistic real estate and private equity, said spokesman Michael Parker.
The Oregon Investment Council, which oversees the $24 billion fund, also approved the use of selected closed-end funds in an emerging markets portfolio.
The council chose Fiduciary Trust to manage $200 million in small-cap growth stocks. It also committed up to $100 million each to Westbrook Real Estate Fund II and Castle Harlan Partners III. At the request of its emerging markets equities manager, Genesis Asset Managers, Oregon approved the use of the Genesis Indian Investment Co., the Genesis Smaller Cos. SICAV and the Genesis Chile Fund within its $114 million emerging markets allocation.
Wilshire and Frank Russell assisted with the small-cap growth hiring, and the Pension Consulting Alliance assisted with the Westbrook commitment.
AEW fund takes new tack
AEW Capital Management is raising as much as $500 million for an unusual fund that will own and operate a real estate investment bank.
Called the AEW Mezzanine Investors Trust, the fund will have a subsidiary that is an operating company. If the subsidiary or the fund eventually go public, pension funds investors would be shareholders in a going concern with as many as 30 employees.
The fund raising began in May and the fund will begin operations with an initial closing of $200 million, expected by the end of the first quarter, according to Cliff Brown, head of the securities and capital markets group of AEW.
Loomis alters fund unit
Loomis, Sayles restructured its mutual fund group and will sell to retail clients only through financial intermediaries effective Jan. 1. The company will outsource direct servicing of retail clients to broker/dealers, financial advisers and mutual fund supermarkets. 401(k) plans using Loomis Sayles only for mutual fund investments also will be serviced through intermediaries. Institutional clients with at least $1 million invested with the company will continue to be serviced by Loomis.
The move will allow Loomis Sayles to lower expense ratios. The firm also will introduce institutional and retail classes of shares.
Cigarette firms targeted
The $75 billion New York State Common Retirement Fund filed shareholder proposals with four cigarette manufacturers, asking them to voluntarily adopt restrictions on marketing to teen-agers, said New York Comptroller H. Carl McCall, sole trustee of the pension fund.
The pension fund owns shares in the four tobacco companies valued at nearly $500 million.
Investors in Shoney's Inc. filed legal documents with the SEC arguing Shoney's should not be allowed to exclude a shareholder proposal on workplace diversity from its 1997 proxy ballot.
The proposal, sponsored by a group led by the General Board of Pensions and Health Benefits of the United Methodist Church, asks Shoney's to publicly disclose its employment practices and record on hiring women and minorities. The investors argue the proposal is allowable because diversity is a policy issue that can affect a company's bottom line.
Shoney's has asked for permission to exclude the proposal, arguing the issue falls within the category of ordinary business operations.
Carolina P&L hires
Carolina Power & Light Co. hired First of America to manage a $22 million small-cap equity portfolio for its $670 million pension fund, said Donald F. Ray, project business analyst. Funding came from a terminated manager he declined to name. LCG Associates assisted.
Oklahoma hikes foreign
Oklahoma Teachers' Retirement System increased its international equity allocation to 13% of assets from 5%. Fixed income dropped to 35% of assets from 40%, and domestic equities declined to 52% of assets from 55%. Officials of the $3.6 billion fund said RFPs for additional international stock managers probably will be issued sometime next year.
Tom Beavers, executive secretary, said no decision has been made on how fixed income will be reduced, but he added that no managers will be eliminated.
Ryder Scott bundles 401(k)
Ryder Scott Co. selected Twentieth Century/Benham Group to provide investments and administration for its $8 million 401(k) plan. The plan will have 13 investment options, including a self-directed brokerage account. A Ryder spokesman said the fund previously was administered through a local bank, which he declined to name, and had one fixed-income investment fund.
Bay County hires
Bay County Employees' Retirement System, Bay City, Mich., hired Northern Trust as custodian and Loomis, Sayles as its second fixed-income manager, said Danean Wright, retirement staff accountant at the $120 million fund.
Northern will replace First Chicago NBD, which is exiting the custodial business.
Loomis will manage $10 million in corporate bonds. The assets will come from reducing a Sanford C. Bernstein portfolio.
Becker, Burke assisted.
3 funds invest in timber
Three large pension funds are among the 13 institutional investors in the Hancock Timber Resource Group's $128 million ForesTree IV timberland investment fund, which closed last week. The funds are: The Fire and Police Pension Association of Colorado; Consolidated Natural Gas; and the Army & Air Force Exchange Service.
K.C. mulls search
Kansas City (Mo.) Employees' Retirement System is looking to start an emerging markets manager search and decided to retain DeMarche Associates after conducting a consultant search, said Pat Gerrick, executive officer.
DeMarche will assist the board in deciding what style and funding schedule to develop before issuing RFPs. The new manager will handle the entire allocation of $22 million. Fund officials want to start the search by March.
PRIM gets new targets
Trustees for the $16 billion Massachusetts Pensions Reserve Investment Trust approved a new asset allocation.
The new target asset allocation will be: 42% domestic equities; 24% fixed income; 16% international equities; 4% emerging markets, newly broken out from international equities; 6% real estate; and 8% alternative investments.
Annette C. Calderwood was hired by Murray Johnstone International as vice president and director of institutional marketing. She succeeds Perry Keck, who will focus on Taft-Hartley.
Ms. Calderwood was a vice president and director of consultant development in the Chicago office of Bank of America Investment Management, where there are no plans to replace her.
AXA-UAP taps Castries
Henri de Castries has been charged with setting up an internal asset management structure for the combined AXA-UAP.
The proposed merger of the two French insurance giants, whose exchange offer ended last week, will create the world's largest money manager.