The Michigan Bureau of Investments, Lansing, which oversees the state's retirement funds, received approval to put up to 2% of its $34.4 billion in assets into long-only positions in commodities futures contracts, said Barry Stevens, executive director.
Staff members will consider an allocation to Goldman Sachs Commodity Index futures contracts, but the fund may not invest in commodities until after the end of its fiscal year June 30.
State Street Global Advisors, Boston, is negotiating to form a joint venture to invest in eastern Europe. Its main thrust would be using limited partnerships, to make direct equity investments. It also might create open- and closed-end pooled funds. If the deal is completed, SSgA's partner would be Emerging Europe Asset Management, Prague. State Street would have controlling interest in the still-unnamed venture, the first operating entity within a new SSgA unit called SSgA Global Alliance, headed by John R. Snow.
The Center for Strategic and International Studies, Washington, created a national commission on retirement policy that will study Social Security, employer-sponsored pension plans and personal retirement savings. The commission of public and private sector business leaders will study the three areas for 18 months and will make final recommendations to improve the systems. The co-chairs are Sen. Judd Gregg, R-N.H., Sen. John Breaux, D-La., Rep. Jim Kolbe, R-Ariz., and Rep. Charles Stenholm, D-Texas.
The Oregon Public Employes' Retirement System will be searching for three small-cap value managers and one small-cap growth manager after it completes a pending custody search, said Michael Parker, a spokesman for the Oregon Investment Council, which oversees the $24 billion system. The council also committed $300 million to TPG II, a buy-out fund run by Texas Pacific Group. Oregon has earned an internal rate of return on its investment in TPG I of 65%, he said.
The small-cap searches will result from a planned rebalancing of its active-passive mix; the amount of the assignments has not been determined. While negotiations have begun in the hiring of a new custodian, he declined to name the candidate.
McKinley Capital Management launched a small-cap equity portfolio for pension funds, defined contribution plans and high-net-worth individuals. The commingled fund will attempt to beat the Russell 2000 growth index.
The minimum account size is $150,000.
Two mutual fund companies are ready with inflation-indexed bond mutual funds. PIMCO's Real Return Bond Fund was launched Jan. 29 and American Century also has a fund in SEC registration.
Bill Gross, a PIMCO managing director, seeded his fund with $5 million of the 10-year U.S. notes and bought at auction another $100 million of inflation-indexed bonds for other PIMCO portfolios. Further details about the American Century fund were not available.
The Florida State Department of Insurance/Treasury Division, Tallahassee, hired two bond managers for its $8.5 billion state operating and special purpose fund.
Hired were Trusco, to run $200 million in a two-year bridge bond portfolio, and Ryan Labs, to manage $300 million in an intermediate-term bond index portfolio. Each will start with $100 million, said Bruce Gillander, chief of the bureau of banking. Assets came from in-house. Chase Manhattan assisted.
Zippo Manufacturing Co., Bradford, Pa., added four Principal Financial Group investment funds to its $10 million 401(k) plan, said CFO Robert R. Jackson. Two balanced funds, a small-cap stock fund and a midcap value equity fund were added. With the additions, the participants now have eight investment portfolio choices run by Principal.
Caraustar Industries, Austell, Ga., hired Frank Russell Trust as sole manager of its $25 million pension plan. The plan will be managed in four Russell equity and fixed-income funds. Russell also will provide investment management, asset allocation advice, trustee, custody and performance reporting. The search was done in-house.
CORRECTION: International Paper Co., Purchase, N.Y., began offering employees two new investment choices for its 401(k) plan. The number was incorrectly reported in yesterday's P&I Daily. Also, the new growth fund is offered by Harbor Capital Advisors.
Peter Murray will become chief executive of the Railways Pension Trustee Co., manager of the £11 billion ($17.9 billion) rail industry pension fund, starting May 1. He succeeds David Adams, who is becoming chief executive of the Chartered Institute of Public Finance and Accountancy. Mr. Murray now is national pensions manager for Unilever's U.K. pension fund. No successor has been named