Washington State Investment Board, Olympia, voted Thursday to place Cursitor-Eaton and Independence Investment on probation. At the same time, the board of the $29 billion pension fund extended both companies' contracts for a year , but warned it could cancel at any time.
Cursitor-Eaton, Washington's global asset allocation manager, runs $350 million for the fund; Independence, which manages $534 million for the fund, is an enhanced index manager.
In 1996, the Cursitor-Eaton portfolio declined 5.7% in value and the Independence portfolio gained 19.6%, 360 basis points behind the S&P 500.
Wilshire, one of Washington's consultants, blamed most of Cursitor-Eaton's underperformance on its big bet in Japan. Wilshire said Independence's performance suffered from ``poor stock selection and trading costs.''
The city of El Paso, Texas, is conducting an asset allocation study of its $268 million employees' pension fund.
The plan is looking at the fund's overall investments for the first time in two or three years, not specific asset classes, said Robert Ash, pension administrator. The board is meeting with Mercer next week to discuss completion of the study.
The Grand Rapids (Mich.) Police & Fire Retirement System started an asset allocation study, its first in five years, said Henry T. Vry, executive director of the $250 million fund.
He expects the study to take several months. SEI Capital Resources is assisting.Changes are not imminent. ``The last time we did a study we made changes; the time before that we didn't,'' he said.
The study is part of the system's regular asset allocation examination. Its current allocation is about 55% domestic equities, 5% international equities and the rest fixed income.
Dow Jones executives are negotiating with a mutual fund family that could use Dow Jones global indexes for indexed mutual funds, said Joseph Acevedo, marketing manager for Dow Jones Global Indexes. Mr. Acevedo said the fund family, which he would not identify, now uses MSCI indexes.
American Century's Global Natural Resources Index Fund is the only mut ual fund currently using Dow Jones for indexing, he said.
Berger Associates acquired the $36 million Omni Investment Fund from Perkins, Wolf, McDonnell, adding it to its family of no-load mutual funds under the name of Berger Small Cap Value Fund.
Perkins, Wolf, McDonnell CIO Bob Perkins will remain the fund's portfolio manager for the next five years. Berger did not pay cash for the fund, said Mr. Perkins. Rather, an ongoing compensation agreement will pay the firm 90 basis points up to $75 million under management, 50 basis points for $75 million to $200 million and 20 basis points on more than $200 million.
Mr. Perkins said the firm sold the Omni Fund to concentrate on attracting more pension and defined contribution plan clients. The firm manages about $60 million in separate accounts.
The World Bank pension fund, Washington, delayed adopting recommendations of an asset allocation study until it completes a n examination of its actuarial assumptions and the methods used to arrive at those assumptions, said Sudhir Krish-namurthi, senior manager pension investments. Any changes in actuarial assumptions will affect how much and how often the bank must contribute to its pension fund, and that in turn could have implications for the fund's asset allocation, Mr. Krishnamurthi said. The World Bank has $7.8 billion in its pension fund and $1.2 billion in its retiree m edical fund.The review should be finished in March.
SEARCHES & HIRINGS
Winthrop Rockefeller Foun-dation trustees hired Gray & Co. as its investment consultant, said Sybil Hampton, executive director.
Gray & Co. is the Little Rock, Ark., foundation's first retainer consultant.
Trustees of the $89 million fund also hired Utendahl Capital Management to manage a $5 million fixed-income portfolio. The money was taken from another manager, which Ms. Hampton declined to identify.
Longshoremen, ILA Welfare & Pension Administration, Jacksonville, Fla., hired NCM Capital Management Group to manage a $5 million balanced portfolio, said James Henderson, administrator of the $65 million fund. Assets came from a reb alancing, said Mr. Henderson.
Minnesota Power & Light Co., Duluth, added the Janus Balanced Fund to its $55 million defined contribution plan.
The fund will replace Fidelity Investments' balanced fund, which had been underperformin g its benchmark, said Jeweleon Tuominen, manager-employee benefits. The decision to switch to Janus was made by the company's investment committee, he said
