PRIM to cut managers
The Massachusetts Pension Reserves Investment Management Board will reduce its roster of fixed-income managers following approval of a new sub-asset allocation for fixed income.
All 21 current fixed-income managers will be reviewed, said Executive Director Greg White. Managers will be reduced to an unspecified number next month.
With an overall allocation of 24% to fixed income, the breakout will be: 55% core portfolio; 25%index; 13% high-yield and convertibles; 4% emerging managers program; 3% corporate lease and in-state mortgage. The dedicated sub-classes for high yield and convertibles are new; global bonds and mortgage-backed securities are now in core fixed income.
SSgA eyes Europe venture
State Street Global Advisors is negotiating to form a joint venture to invest in eastern Europe, including Russia, the Czech Republic, Poland and Hungary. Its main thrust of the joint venture would 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.If the joint venture is completed, SSgA's partner would be Emerging Europe Asset Management, Prague.
Hughes suit revived
A lawsuit seeking more than $1 billion of actuarial surplus from the Hughes Aircraft pension fund. was sent back to District Court by a Court of Appeals.
The class-action suit seeks the pension surplus of a Hughes contributory defined benefit plan. Hughes closed the contributory plan to new employees in 1991, putting all new employees in a non-contributory plan and giving the existing participants the option of switching.
The salaried participants contend that Hughes effectively terminated the contributory plan under ERISA, and Hughes is using the $1 billion actuarial surplus to fund the newer non-contributory plan.
Hughes maintains it merely amended its pension plan.
Hughes will seek a review of the plaintiff's appeal by the full appeals court, a spokesman said.
Dispute going to trial
A Feb. 3 trial date is set for Arnold C. Schneider and his former partners at Wellington Management, locked in a legal dispute over his establishment of a money management boutique earlier this year.
Four Wellington partners have filed suit against Mr. Schneider in Middlesex County (Mass.) Superior Court for breaching a non-compete clause in his partnership agreement and his fiduciary duty. They also are seeking damages of $1 million.
Mr. Schneider has countersued in the Court of Common Pleas in Chester County, Pa., saying Wellington acted improperly and in bad faith by expelling him as a partner and that Wellington violated the partnership agreement and its fiduciary duty.
Retirement policy panel set
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, composed of public and private sector business leaders, will study the three areas for 18 months and will make final recommendations to improve these systems. The four 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.
Michigan OKs commodities
The Michigan Bureau of Investments, 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 actual invest in commodities until after the end of its fiscal year on June 30, Mr. Stevens said.
Defined benefit bundling
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.
Glaxo hires Snyder
Glaxo Wellcome Inc. hired Snyder Capital Management for its $600 million pension fund. Snyder will be assigned $25 million to manage in small- to midcap value equities.
Conrail taps 3
Conrail hired three managers for its $450 million 401(k) plan, said Thomas J. Conroy, assistant treasurer. It added a Fidelity S&P 500 index fund, a Pilgrim Baxter growth equities fund and a Miller Anderson Sherrerd value equities fund. The plan now offers nine investment choices.
Carpenters picks 3
Carpenters Local Union No. 225 & Millwrights Local Union No. 1263 Pension Fund 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 is in fixed income managed by Lowe, Brockenbrough & Tattersall.
Alex. Brown & Sons assisted.
Oregon invests in TPG II
The Oregon Investment Council, which oversees the $24 billion Oregon Public Employes' Retirement System, committed $300 million to TPG II, a buy-out fund managed by Texas Pacific Group. Oregon has earned an internal rate of return on its investment in TPG I of 65% a spokesman said.
Voting panel sought
A new report is calling for establishment of a "European Union voting standards committee" to address barriers to voting shares. If not removed, such barriers will become a drag on the EU economy, said the study, undertaken done by the Centre for European Policy Studies and Davis Global Advisors.
The study, which found European institutions often do not exercise their votes, said the new EU body, composed of industry and investor representatives, should seek more information on annual meeting agendas, voting by mail, an end to depositing shares in order to vote, lowering voting cost and adoption of one-share, one-vote capital structures.
Letter campaign urged
New York City Comptroller Alan G. Hevesi is urging large institutional investors to write the four SEC commissioners and ask them to reverse the current position letting companies exclude employment-related shareholder proposals because they deal with ordinary business matters.
"The recently highly publicized case involving employment discrimination at Texaco demonstrates that the SEC's (1993 change in policy to let companies exclude such proposals) decision was wrong," Mr. Hevesi wrote in his letter to pension funds and other large investors. In his letter, Mr. Hevesi noted that despite the Texaco case, the SEC recently denied shareholders of a number of companies the right to consider and vote on employment-related issues.
Florida hires 2
The Florida State Department of Insurance/Treasury Division 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. Assets came from in-house. Chase Manhattan assisted.
Managed futures for Wayne
Wayne County Retirement System trustees selected Smith Barney Futures to run $10 million in managed futures for the $1 billion system, said Joseph Magda, executive secretary.
Smith Barney acts as a manager of futures managers in a separate account for the system, he said.
Caraustar hires Russell
Caraustar Industries 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 asset allocation advice, trustee, custody and performance reporting.
Railways taps Murray
Peter Murray will become chief executive of the Railways Pension Trustee Co., manager of the 11 billion pounds ($17.9 billion) rail industry pension fund, starting May 1.
He will succeed 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 Ltd.'s 3.5 billion pounds U.K. pension fund. No successor has been named.
Mr. Murray also will become chairman of the National Association of Pension Funds in May; he now serves as vice chairman.
Zippo adds 4 options
Zippo Manufacturing Co. added four Principal Financial Group investment funds to its $10 million 401(k) plan. Added were two balanced funds - one with a stock emphasis and the other with a bond emphasis - a small-cap stock fund and a midcap value equity fund. The plan now offers eight options, all run by Principal.