Washington State Investment Board, Olympia, voted Thursday to place two money managers on probation following recent underperformance against their benchmarks.
The board of the $29 billion fund served notice to Cursitor-Eaton, its global asset allocation manager, and Independence Investment Associates, an enhanced index manager, that it expects to see improvement soon.
At the same time, the board extended both companies' contracts for a year, but warned it could cancel at any time.
Cursitor-Eaton manages about $350 million for the fund; Independence, $534 million. In 1996, Cursitor-Eaton portfolio declined 5.7% in value and the Independence portfolio gained 19.6%, 360 basis points be hind the S&P 500.
Wilshire Associates, 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 tra ding costs.''
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 mutual fund now using Dow Jones for indexing, he said.
The Grand Rapids (Mich.) Police & Fire Ret irement 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 and was not prompted by a new state law designed to imp rove public pension fund investment management.
Mr. Vry noted the system's current allocation is consistent with the law.
Its allocation is about 55% domestic equities, 5% international equities and the rest fixed income.
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, sa id Robert Ash, pension administrator.
The board is meeting with Mercer next week to discuss the completion of the study, he said.
RogersCasey is conducting a major research project on risk management in the institutional market.
Extensive interviews with 400 large institutional investors will identify issues and categories of risk management and how institutions define and apply risk management practices in the investment process.
The study will provide bas ic information for the emerging risk management discipline, according to Christine England, managing director of market research. The study should be finished in April.
HIRINGS
Winthrop Rockefeller Foun-dation trustees hired Gray & Co. as its investment consultant, said Sybil Hampton, executive director.
Gray 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 millio n 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 m illion balanced portfolio, said James Henderson, administrator of the $65 million fund. Assets came from a rebalancing.
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 underperforming its benchmark, said Jeweleon Tuominen, manager-employee benefits. The decision to switch to Janus was made by the company's investment comm ittee, he said.
WHO'S NEWS
Patrick F. Thomas, in charge of portfolio analysis for McKesson Corp.'s $1.2 billion in retirement and foundation assets, joined Strategic Investments Solutions as an investment analyst, a new position. He will be r esponsible for the firm's manager research efforts. At McKesson, Bob Lahaie, formerly a senior investment analyst, succeeded him.
