The Massachusetts Pension Reserves Investment Management Board, Boston, will reduce its roster of fixed-income managers in light of a new asset allocation to fixed income and the creation of a new dedicated sub-asset class for high yield and convertibles. Trustees for the $16 billion pension fund decided to allocate 24% of fund assets to fixed income. The PRIM fund, which already had a 24% bond allocation, recently merged with the Massachusetts State Teachers' and Employees' Retirement Systems, which had a 37% allocation to fixed income.
The new fixed-income allocation will be divided as follows: 55% core portfolio; 25% index; 13% high-yield and convertibles; 4% emerging managers program; 3% corporate lease and in-state mortgage.
The 21 current bond managers will be reviewed to see which ones will be kept, said Executive Director Greg White. Managers will be reduced to an unspecified number next month.
The Los Angeles County Employees Retirement Association, Pasadena, Calif., intends to study its international investments in March. The $20 billion fund will do an overall review and look at whether to keep its current global mandate for international investment or to invest regionally and how much to invest active vs. passive. The study will be conducted by the staff with assistance from its general consultant Frank Russell Trust Co.
State Street Global Advisors, Boston, is negotiating to create a joint venture to invest in eastern Europe, including Russia, the Czech Republic, Poland and Hungary.
Its main thrust will be using limited partnerships, a new investment vehicle for State Street, to make direct equity investments. It also might create open- and closed-end pooled funds. Its partner would be Emerging Europe Asset Management, Prague. State Street would have controlling interest in the still-unnamed venture. If the deal is completed, venture will be the first operating entity within a new SSgA unit known as SSgA Global Alliance, headed by John R. Snow.
Fidelity Investments will introduce bundled services for defined benefit plan management later this year, said Robert Reynolds, president of Fidelity Investments. The move will capitalize on Fidelity's total benefits outsourcing capabilities, said Mr. Reynolds, which now service about 15 large clients. Included in the service will be complete administration of defined benefit plan services and investment management.
SEARCHES & HIRINGS
Dekalb Genetics Corp., De Kalb, Ill., is hiring its first consultant to conduct searches for additional vendors for its $130 million 401(k) plan. A decision is expected in February, said Roger Maas, manager of retirement benefits. He would not release the names of the finalists. The search is being conducted in-house.The plan has five options run by Harris Investment Management, Cook & Bieler and Aetna.
Rhode Island State Investment Commission, Providence, named finalists in its emerging markets manager search for its 457 plan. Montgomery Asset Management, Schroder Capital Management and State Street Global were selected by officials of the $83.6 million plan.
A decision is expected next week. Wilshire Associates is assisting.
Glaxo Wellcome Inc., Research Triangle Park, N.C., hired Snyder Capital Management for its $600 million pension fund. Snyder will be assigned $25 million to manage in small- to midcap value equities.
Carpenters Local Union No. 225 & Millwrights Local Union No. 1263 Pension Fund, Atlanta, hired three new equity managers. The $47 million retirement fund hired GLOBALT, INVESCO and Montag & Caldwell to split $16 million in equity investments that had been in mutual funds. Globalt and Montag & Caldwell will handle large-cap growth investments, and INVESCO will run large-cap value equity. The remaining $30 million will remain with existing fixed-income manager Lowe, Brockenbrough & Tattersall. Alex. Brown & Sons assisted.
International Paper Co., Purchase, N.Y., began offering employees five additional options for the $1.8 billion 401(k) this month, said Marianne M. Parrs, chief financial officer. The new funds now offered are a stable value fund managed by Bankers Trust, Sanford C. Bernstein and PIMCO; a balanced fund by Vanguard; an S&P 500 stock index fund by Vanguard; a growth fund by Harbor Capital Management; and an international securities fund by Janus. Employee contributions had been invested only in company stock. Company matching contributions will continue to be made only in company stock.
Conrail hired three managers for its $450 million 401(k) plan, said Thomas J. Conroy, assistant treasurer for Consolidated Rail Corp., Philadelphia. It added a Fidelity S&P 500 index fund, a Pilgrim Baxter growth equities fund and a Miller Anderson Sherrerd value equities fund. The changes bring to nine the total investment portfolio choices offered by the plan