The New York State Common Retirement Fund, Albany, terminated Carlson Investment Management, confirmed H. Carl McCall, state comptroller and sole trustee of the $78 billion fund. Carlson was a small-cap value equity manager in the emerging manager trust of F.I.S. Funds Management.
Carlson was terminated because its parent, Carlson Investment Management S.A., said it plans to close its small-cap operation in March, according to Cynthia Munk, a spokeswoman for Mr. McCall. The firm ran $14 million for the fund. The money will be allocated to cash ($2.5 million) and an existing equity index portfolio ($11.5 million).
Underweighting in Japan helped international managers outperform the MSCI EAFE Index by nearly two percentage points in the fourth quarter, according to WM Co. Underweighting Japan by an average of 10 percentage points plus good stock selection there boosted the WM Non-U.S. universe to a 3.6% return in the fourth quarter, compared with 1.7% for MSCI EAFE. The median manager returned 3%.
For the one-year period, international managers returned 13.1% vs. 6.4% for EAFE. The median manager returned 12.5%.
Lilly Industries, Indianapolis, hired Washington Square Advisers to manage fixed income for its $83 million defined benefit plan. Washington Square will get at least a portion of $12 million. Greg Brown, audit and tax manager, declined to give the exact amount or say if Washington Square was replacing a terminated manager. The plan has 40% in fixed income, Mr. Brown said.
Oxford Financial Advisors assisted.
New York State Teachers' Retirement System, Albany, committed $25 million to Mesirow Capital Partners VII, said Candace Ronesi, a spokeswoman for the $55 billion fund. Mesirow VII will make later-stage private equity investments and participate in management buy-outs, said Ms. Ronesi.
The investment was funded from cash.
Princess House Inc., North Dighton, Mass., hired INVESCO as its bundled service provider for its $6 million 401(k) plan. Princess House declined to name the existing service provider. INVESCO will provide six diversified investment funds as well as record keeping and communications.
California Department of Personnel Administration, Sacramento, hired Pacific Alliance Capital and T. Rowe Price to offer investment options for its $3 billion Savings Plus Program, which includes 401(k) and 457 plans, said John Kozusko, administrator of the Savings Plus program.
Pacific Alliance's Stepstone Value Momentum Fund was chosen as a conservative equity option replacing Putnam's Growth and Income Fund; T. Rowe Price's New Horizons Fund replaced Delaware's DelCap Fund as an aggressive equity option.
The changes were a result of a periodic five-year review. William M. Mercer assisted.
Rhode Island State Investment Commission, Providence, hired Schroder Capital Management International as the $4.7 billion pension fund's first emerging markets manager. Schroder will handle almost $100 million. It already manages $244 million in a European-region equity portfolio for the fund, said Steve Klamkin, spokesman.
Other finalists were Montgomery Asset Management and State Street Global. Wilshire Associates assisted.
New Bedford (Mass.) Retirement hired Loomis Sayles to run $15 million in fixed-income following a restructuring of the $100 million plan. The funding has yet to be determined, but is likely to come from the liquidation of a $20 million fixed-income portfolio run by BankBoston, said Timothy O'Connor, city auditor. Watson Wyatt assisted.
The San Diego Community Foundation, San Diego, hired two small-cap managers, said Bob Clelland, trustee of the $80 million fund. Kestrel was assigned $3.2 million and Becker Capial, $9.8 million. Funding came from a reallocation.
Wurts & Associates assisted.
The Investment Research Institute, Cincinnati, chose Fifth Third Investment Advisors as bundled provider to start a 401(k) plan for its 80 employees. Fifth Third will provide IRI with investment options, record keeping, a voice-response system, participant communications and education.
The search was done in-house.
Joe H. Wright Jr. has taken over management responsibility for the $2.7 billion J.C. Penney Co. pension plan and the $4.5 billion 401(k) plan. Mr. Wright replaced William H. Baxley III, who was named head of risk management activities at J.C. Penney, Plano, Texas. Mr. Wright has spent the last five years in the J.C. Penney corporate real estate and finance departments