The Consolidated Rail Corp. pension fund, Philadelphia, is leaning toward eliminating real estate as a separate asset class and gaining exposure through publicly traded real estate securities in its U.S. equities allocation, said Thomas J. Conroy, assistant treasurer of investor relations and pensions.
The fund, with $1.2 billion in assets, has a 5% target for real estate but only about 3% of assets in the category. The fund would not pull money from real estate, but let its exposure fall as investments mature, Mr. Conroy said. That decision will be made separate from the asset allocation study the fund hopes to complete next month. No manager changes will result from the study, Mr. Conroy said. Callan Associates is assisting.
The Texas Pension Review Board asked Dallas city officials to hand over actuarial studies the board claims show the Dallas Employees' Retirement Fund is financially sound. The PRB said it would subpoena the records if the city does not comply.
A dispute between fund trustees, who claim the city's 9.2% projected annual rate of return on investments is too high, and the Dallas City Council is under review by the PRB. Fund officials put the rate of return at 8.25%, which could lead to shortfalls when projected 30 years into the future. The Dallas City Attorney's office has not decided whether to turn over the studies to the PRB.
The Ziegler Cos. signed a letter of intent to purchase Glaisner Schilffarth, Grande & Schnoll, a financial firm that offers investment management consulting for institutions and high-net-worth individuals. The letter calls for Ziegler to pay $2.75 million to $3.75 million, depending on performance after the sale.
Three Norwest Corp. business units that provide trust services to institutional investors have been combined into a new unit, master trust and custody services, which oversees master trust assets totaling $100 billion. The corporate custody, financial institutions custody and master trust divisions were combined to form the new unit under Steven Greenstein, vice president. Mr. Greenstein formerly managed the master trust division.
SEARCHES & HIRINGS
The Archdiocese of Los Angeles hired Miller Anderson Sherrerd to manage U.S. core large-cap equities, said Jose Debase, CFO for the $400 million pension and endowment fund. The new manager will be assigned a little more than $40 million for the active portfolio. Assets will come from a reallocation.
National Service Industries, Atlanta, awarded Vanguard $50 million to manage in an S&P 500 index for the company's $130 million defined benefit pension plan.
Vanguard will be the first passive manager and was hired after a restructuring that also allocated $5 million to MetLife Realty Group and $2 million to Longleaf Partners as the fund's first real estate managers, said Chester Popkowski, vice president/treasurer.
Assets came from the termination of three active large-cap equity managers: Ashland Management, MacKay-Shields and WR Lazard. The fund also plans to terminate one international equity manager. He declined to name the firm.
The decision to move to passive management was based on analysis that showed little difference between risk/reward ratios of passive and active styles in the larger markets, he said. Towers Perrin assisted.
The company also added two funds to its $200 million 401(k) plan. Vanguard's S&P 500 fund and INVESCO's small-cap fund will bring the plan's total number of options to seven.
Nash Finch Co., Minneapolis, plans to add funds to its $110 million 401(k) plan in the second half of 1997.
The company expects to add at least one fund to the four existing options because of plan growth, said Suzanne Allen, treasurer. Current providers are Fidelity and Norwest. Fidelity offers a balanced fund and Norwest a diversified equity fund along with two funds from subadvisers: a small-cap fund from Peregrine Capital Management and a GIC fund from Galliard Capital Management.
Jeffrey Slocum is the consultant.
Middlesex Memorial Hospital, Middletown, Conn., hired its first consultant for both its pension fund and endowment.
Ennis, Knupp will monitor the performance of the six managers of the $70 million defined benefit plan and the $30 million endowment fund. Searches for new managers are not expected in the near future, he said.
David B. Rickard was hired by RJR Nabisco Holdings Corp., New York, as senior vice president and CFO, replacing Robert S. Roath, who is retiring. Mr. Rickard will have general oversight of RJR's $4.7 billion pension funds, said Carol Makovich, a spokeswoman for RJR. Mr. Rickard, executive vice president and chief administrative officer for International Distillers and Vintners Americas, is expected to join RJR Nabisco in mid-March