Fixed-income manager PIMCO Advisors and its affiliate, Thomson Advisory Group, signed a definitive agreement to acquire one-third of equity shop Oppenheimer Capital for about $265 million in preferred stock and assumption of debt.
Oppenheimer will function as an indirect subsidiary of PIMCO Advisors.
PIMCO and Thomson will acquire 100% of the stock of Advantage Advisers, which manages eight closed-end funds, and is an affiliate of Oppenheimer Group.
The deal excludes the publicly traded units of Oppenheimer Capital.
California Public Employees' Retirement System staff and consultants are preparing a review of the $108 billion fund's asset allocation policy.
One area of interest is the new inflation-linked U.S Treasury bonds. The review will look at an appropriate strategic role for the bonds in the CalPERS portfolio. Study results are expected in June.
At the March 17 investment committee meeting, the staff also will propose a domestic equity portfolio restructuring. The proposal will consider the role of each of the Sacramento-based fund's external active managers, in-house passive management and a proposed role for in-house active management.
CalPERS' staff also is considering internal active management of international bonds, developing index-enhancement strategies using index futures and active cash management and developing an internal derivatives investment group to run inflation-linked bonds, synthetic index funds, currency exposures and other derivative or hybrid instruments.
Today, the CalPERS real estate investment committee is discussing a draft RFP for managers of apartment investments. The RFP is expected to be issued in March.
Centerior Energy Corp., Independence, Ohio, and Ohio Edison Co., Akron, are studying how to consolidate their defined benefit, and 401(k) and nuclear decommissioning funds. Gregory Tropf, senior investment analyst, said the two companies, which are merging, want to consolidate.
Centerior has $435 million in defined benefit assets and Ohio Edison has $1 billion. In 401(k)s, each has about $250 million. In nuclear decommissioning, Centerior has $150 million; Ohio Edison's figure wasn't available.
Mr. Tropf is part of a team of six that will consider in the next few months whether to bring in an investment consultant. Centerior uses Summit Strategies, and Ohio Edison uses Ennis Knupp. He said the two companies have only a few managers in common.
The IBM Japan Ltd. pension fund, with assets of 300 billion yen (roughly U.S. $2.5 billion), is planning an asset/liability study that would help it take advantage of deregulation expected soon for Japan's tax qualified pension plans. The study is expected to begin in April and last about two months, said Akihiko Ohwa, manager of financial projects in the treasury unit of IBM Japan.
Washington State Board of Investments, Olympia, added the first six externally managed funds to the state's new hybrid defined contribution plan for teachers. As of April 1, six indexed commingled funds from State Street Global will be offered - S&P 500, Russell 3000 and 2000, bond, EAFE and short-term. Plan assets now are in a total allocation portfolio, which is invested in the state's $26.8 billion defined benefit plan. Searches for more options could begin in the summer.
Miami Beach (Fla.) General Employees Retirement System hired RhumbLine Advisers as a domestic equity index manager following an asset allocation study. RhumbLine was chosen to run $50 million of the $200 million fund's assets after the pension board decided to index half its assets. Provident Investment Counsel, an active equity manager, was terminated due to the reallocation.
The fund is close to choosing a passive bond manager. A decision is expected at the March 11 board meeting. Bill Cottle of Dorn, Helliesen and Cottle is assisting.
Massachusetts Painters District Council No. 35, Roslindale, Mass., hired Putnam Institutional Management as its first midcap equity manager. The $8 million mandate is the last in a long line of hires that began in 1995 after an asset allocation study for the $75 million plan, said Sharon Sagany, fund administrator. Segal Advisors assisted.
Taunton (Mass.) Contributory Retirement System picked Bank of Ireland Asset Management to manage $3.25 million in international equities, said Paul J. Slivinski, executive secretary of the $65 million fund.
Funding came from terminating Wellington Management late last year.
The system will invest in an institutional mutual fund packaged and sold by Allmerica because Bank of Ireland does not accept direct investments of less than $10 million