SACRAMENTO, Calif. - The board of the $68.5 billion California State Teachers Retirement System decided to manage the cash collateral from its securities lending program in-house rather than with external securities lenders.
The staff believes managing the collateral in-house will give it more control over risk and improve the investment return. In November, the fund had $20 million in cash collateral invested.
The fund also decided on a performance benchmark for its global asset allocation managers. The benchmark is two percentage points above a combined 60% weighting of the Morgan Stanley Capital International World Index and 40% weighting of the Salomon Brothers World Government Bond Index.
asset management group
CHARLOTTE, N.C. - NationsBank Corp. formed a $125 billion asset management group divided into four teams: investment management; institutional trust; retirement services; and consumer investments.
The investment management unit will be divided into three entities: NB Capital Management will handle multiproduct and balanced institutional relationships; Boatmen's Capital will serve as institutional bond manager; and a unit not yet named will handle private client assets. Institutional master trust administration and securities lending will be housed under the institutional unit, to be called Boatmen's Trust.
The retirement services unit will provide retirement products and services for individuals and businesses. The consumer investments team will oversee retail products.
TradeStreet Investment Associates and Gartmore Global Partners will remain separate.
Abitibi-Price nears end
of manager search
TORONTO - Abitibi-Price Inc. is completing a search for a non-North American global equities manager, said Fred L. Baldwin, assistant treasurer, overseeing the company's C$900 million (U.S. $671 million) pension fund.
He declined to name the firm selected at this point, but plans to announce the appointment soon. The new manager will be assigned C$40 million, Funding will come from a reallocation among U.S. and Canadian equity managers; all will be retained.
Mercer is assisting in the search.
CLEARWATER, Fla. - Executives of Advanced Investment Technology are doing research on how to create an international equity offering using the firm's artificial intelligence and genetic algorithm techniques, said Douglas W. Case, director of equity portfolio management. The international product would rely on individual stock-specific forecasts and relative country valuations. AIT hopes to offer the product by the third quarter, Mr. Case said.
AIT's midcapitalization strategy returned 27.9% gross of fees in 1996, compared with the S&P MidCap Index return of 14.3%. Its core U.S. equity product, as measured by a mutual fund it managers, returned 27.2% in 1996, compared with the Frank Russell 3000 return of 21.8%.
AMG makes good
on Burridge acquisition
BOSTON - Affiliated Managers Group, Boston, formally acquired slightly more than 50% of The Burridge Group. Terms were not disclosed. Chicago-based Burridge is a midcap growth stock manager with $1.4 billion in assets. Management will remain and will retain the rest of the equity in the firm. The acquisition, AMG's seventh, will bring its affiliate assets to $20 billion.
Govett Drops Berkeley
as fund subadviser
LONDON - John Govett & Co., London, terminated Berkeley Capital Management as the subadviser of the Govett Smaller Companies Fund and brought management of the fund in-house under Gareth Watts, senior fund manager. Mr. Watts has responsibility for all of Govett's offshore funds that invest in U.S. equities. Management of one fund, the Govett International Equity fund, was passed to a Govett colleague, Peter Kysel.
Separately, Govett hired FPS Services to provide shareholder, broker and distribution services.
TIAA creates team
for lease financing
NEW YORK - In an effort to become a key player in the lease financing market, the Teachers Insurance and Annuity Association established a lease financing team in its securities division.
The new team, headed by Managing Director Nancy Freund Heller, will specialize in providing flexible long-term fixed-rate financing on the debt portion of leveraged leases for corporations in a wide range of industries.
Actuaries want new bill
for simplified plans
ARLINGTON, Va. - The American Society of Pension Actuaries is drafting a legislative proposal for a simplified defined benefit plan it hopes will interest small businesses, said Brian H. Graff, executive director of the Arlington-based organization.
Like the SIMPLE plan that was part of last year's pension law, the "simple DB plan" will give smaller employers exemptions from the regulations and paperwork large employers face when they set up traditional pension plans.
The group will unveil its proposal this month.
L.A. County terminates
value portfolio manager
PASADENA, Calif. - The Los Angeles County Employees Retirement Association dropped INVESCO Capital Management as a value equity manager with a yield tilt.
The $482 million held by INVESCO will be transferred to the Lehman Aggregate bond index fund run by Bankers Trust Co.
INVESCO was dropped because of a structural change in the investment approach of the $20 billion pension fund, and because it was felt the actively managed value equity with a yield tilt assignment was not adding value vs. a passive alternative.
A spokeswoman for INVESCO said she didn't have "final word" on the change.
New England closes
BOSTON - New England Investment Cos. closed its acquisition of Jurika & Voyles for $110 million in cash and units in the publicly traded partnership.
Jurika & Voyles, which manages $5.6 billion in equity, balanced and fixed income products, will be NEIC's 13th money management unit and bring the firm's total assets under management to $100 billion.
Jurika & Voyles will remain independent and under its current partnership.