UAM STUDYING TCW
United Asset Management is reviewing a possible acquisition of Trust Company of the West, sources said.
TCW has been on the block since last fall.
At first blush, industry observers said a UAM/TCW deal might sound out of character for those firms, but many warmed up to the idea after a second look. UAM can offer TCW continued independence with a handsome payout, and TCW can be UAM's largest and most diverse acquisition yet.
Sources have put the price tag for acquiring TCW around $800 million.
Spokesmen for both UAM and TCW would not comment.
Washington taps SSgA
The $26.8 billion Washington State Board of Investments hired State Street Global Advisors to run the first externally managed options in the state's new hybrid defined contribution plan for teachers.
State Street will offer six passive commingled funds, an unusual vehicle among public fund conversions to 401(k)-like plan designs. State officials said the choice was based on both cost and ease of understanding.
Pennsylvania shifts assets
The $34 billion Pennsylvania Public School Employes' Retirement System allocated $100 million apiece to three large-cap domestic equity managers, said CIO John Lane. Institutional Capital, Investment Advisers and McKay-Shields were hired, subject to contract negotiations.
Trustees also approved creating an internally managed MSCI EAFE index portfolio, and made an initial allocation of $360 million, said Mr. Lane.
All changes will be funded from cash.
Managers lag S&P 500
Most money institutional money managers underperformed the S&P 500 index in 1996, according to INDATA investment research results. Atlanta pension consultant William Kennedy said about 45%of the 1,254 institutional equity portfolios tracked by INDATA - totaling about $450.5 billion - outperformed the S&P. For the 10 years ended Dec. 31, he said about 64% outperformed the index. Money managers had only about 2.7% in cash reserves at the end of the year, he said.
Oeschger joins Russell
Christoph Oeschger will join Frank Russell in Switzerland as a senior consultant, a new position. Mr. Oeschger previously was managing director of the 3.9 billion Swiss franc ($2.74 billion) ABB Group pension fund.
TVA goes overseas
The $5.2 billion Tennessee Valley Authority Retirement System made its first international equities investments, hiring State Street Global Advisors and Rowe Price-Fleming. Each manager received $125 million, said Randy Snyder, executive secretary. The money came from U.S. equities. Wilshire Associates assisted.
The median endowment fund earned an investment return of 17.1%in the year ended June 30, a National Association of College and University Business Officers Endowment Study found.
On a dollar-weighted basis, the average endowment return was 20.6% in part a reflection of smaller endowments' higher allocation to cash. In the same period, the S&P 500 returned 26% the Salomon Brothers Broad Bond Index returned 5% and the MSCI EAFE Index returned 13.3%
The average allocation to non-U.S. stocks increased 1.6 percentage points to 7.9%of assets. The average allocation to domestic fixed income fell 2.6 percentage points to 25.5%
The 467 endowment funds in the survey controlled $123 billion as of June 30.
Emory eyes overseas boost
The $3.5 billion endowment of Emory University asked consultant Cambridge Associates to come up with a recommendation on increasing its international equities exposure this year. The endowment now has about 10%of assets in non-U.S. stocks. A decision is expected "probably by the end of 1997," said M. Wayne Coon, associate vice president.
Merrill hires from PanAgora
Merrill Lynch Asset Management's London operation hired the CIO of PanAgora Asset Management's London office plus three fixed-income managers from J.P. Morgan Investment Management.
Clive Lang will join Merrill as head of quantitative research. Colin McLatchie, PanAgora's chief operating officer, has assumed Mr. Lang's duties and title.
Tim Manna, formerly head of J.P. Morgan's London fixed-income team, and bond manager Robert Brown also are joining Merrill. The firm also hired bond manager David Jacob, who was about to transfer to Morgan's balanced management team in New York.
A restructuring already was taking place within Morgan, and the departing managers' jobs have been reassigned internally.
Gillette promotes Coccoluto
Tony Coccoluto was named manager-benefits trust at Gillette Co. to oversee the company's more than $1.5 billion 401(k) plan and $800 million defined benefit plan.
Mr. Coccluto is replacing Nancy I. Chaddock, who retired. Mr. Coccoluto was an analyst in foreign exchange and interest rate management in the treasury department.
CalSTRS rates managers
The $68 billion California State Teachers Retirement System gave "good" performance ratings to separate real estate account money managers AMB Institutional Realty Advisors, Equitable Real Estate, Metric Institutional Realty, MIG Realty and Westmark Realty.
CalSTRS also gave a "satisfactory" to The O'Connor Group, and gave Retail Property Trust a "needs improvement." The ratings report said the Retail Property Trust has given disappointing investment returns and lacks a future strategy. No manager received the fund's lowest rating.
The real estate manager ratings were part of an annual review conducted by the fund.
U. of Iowa taps Artisan
The $400 million University of Iowa Foundation hired Artisan Partners to manage $10 million in core international equity and added $5 million to a Everest Capital hedge fund.
The foundation hired the firms for rebalancing and a need for international diversification, said Larry Bruse, treasurer.
Money may come from U.S. equity managers or its other international equity manager, Warburg Pincus.
Cambridge Associates assisted.
NYC Deferred shifts
New York City Deferred Compensation Plan hired The Vanguard Group to manage $35.9 million in a balanced fund.
Vanguard will replace Chancellor Capital Management July 1, said Lou Porpora, contract supervisor and operations manager for the $2.2 billion plan. Mercer assisted.
Vanguard manages a $10 million intermediate-term bond fund, but will be replaced July 1 by Morgan Grenfell Asset Management.
Orange County selects
The $3.4 billion Orange County Employees Retirement System allocated $5 million to Cornerstone Equity Investors IV. Cornerstone is a private equity fund that makes acquisitions of public and about-to-go public companies.
The allocation will be drawn down by Cornerstone over two to three years from cash.
State Street adds funds
State Street Global Advisors will introduce three new asset allocation mutual funds midyear. The three lifestyle funds will be clones of SSgA's existing institutional LifeSolution group commingled trusts and span the risk spectrum.
The mutual funds will be open to both institutional and retail clients.
5 join J.P. Morgan
The two founders of Becker & Rooney will be joining three other principals of the unit in a move to J.P. Morgan Investment Management.
Founders Murray L. Becker and Kathleen D. Rooney will move with Helen McGreevy, Peter Chappelear and Claudia Sievert. Becker & Rooney, a stable value consulting and investment management firm, was merged with Kwasha Lipton in 1995, which has since been acquired by Coopers & Lybrand.