WASHINGTON - President Clinton said it was "a big mistake" that hearings have not yet been scheduled for Labor Secretary nominee Alexis Herman.
Speaking at a White House meeting on Medicaid a few weeks ago, Mr. Clinton said Ms. Herman is "clearly well qualified" and is supported by many in the business and labor communities.
The nomination hearing is on hold until Senate Republicans finish an investigation into any role Ms. Herman might have played in mixing politics with policy at White House coffee meetings.
"If anybody wants to vote against her for whatever reason, they're plainly free to do that, but she deserves a hearing and if she gets a hearing, she's going to be confirmed," Mr. Clinton said.
CalPERS mulls joining suit against Disney
SACRAMENTO, Calif. - The California Public Employees' Retirement System will decide at its March 17 investment committee meeting whether to join a class-action shareholder suit against The Walt Disney Co. over the large severance package given Michael Ovitz, said Brad Pacheco, a spokesman.
Mr. Ovitz, former Disney president, was fired in December.
Washington state puts managers on probation
OLYMPIA, Wash. - Washington State Investment Board, Olympia, placed two money managers on probation following recent underperformance against their benchmarks.
The board of the $29 billion fund served notice to Cursitor-Eaton Asset Management Co., Boston, its global asset allocation manager, and Independence Investment Associates Inc., Boston, an enhanced index manager, that it expects 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's portfolio declined 5.7% in value and the Independence portfolio gained 19.6%, 360 basis points behind 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 trading costs."
World Bank holds off on asset changes
WASHINGTON - The World Bank pension fund delayed adopting recommendations of an asset allocation study until it completes an examination of its actuarial assumptions and the methods used to arrive at those assumptions, said Sudhir Krishnamurthi, 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, with $7.8 billion in pension fund assets and $1.2 billion in its retiree medical fund, hopes to complete the review by the end of March.
Mutual fund considers indexing to Dow Jones
NEW YORK - Dow Jones & Co. Inc. 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 Investment's Global Natural Resources Index Fund is the only mutual fund now using Dow Jones for indexing, he said.
Hearings scheduled on Social Security
WASHINGTON - Rep. Jim Bunning, R-Ky., chairman of the House Subcommittee on Social Security, is sponsoring hearings March 6 on the future of Social Security.
One topic will be the Social Security Advisory Council's recent recommendations to shore up the financially strapped system. Three members of the council will testify: Edward Gramlich, chairman of the council and dean of the school of public policy at the University of Michigan; Sylvester Schieber, head of research at Watson Wyatt; and Robert Ball, former head of the Social Security Administration.
El Paso conducts asset study
EL PASO, Texas - The city of El Paso 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.
Grand Rapids looks at its investments
GRAND RAPIDS, Mich. - 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 and was not prompted by a new state law designed to improve public pension fund investment management. The system's current allocation is consistent with the law. Its allocation is about 55% U.S. equities, 5% international equities and the rest fixed income.
Royal Bank acquires custody business
TORONTO - Royal Bank of Canada, Toronto, and its wholly owned subsidiary Royal Trust finalized an agreement to acquire the institutional and pension custody and related businesses of both Toronto-based Montreal Trust and Scotiabank.
Royal Bank Financial Group will acquire about C$120 billion (U.S. $88.5 billion) of client assets under custodial administration.
Terms of the agreement were not disclosed. The deal is expected to close March 31, subject to due diligence and regulatory approvals.
Montreal Trust is a subsidiary of the Bank of Nova Scotia and a member of the Scotiabank Group of Companies.
Philadelphia drops minority bond manager
PHILADELPHIA - The Philadelphia Municipal Pension Fund terminated P.G. Corbin & Co., Philadelphia, a minority firm that ran $59 million in long-term bonds, and will allocate the money to other managers, said Joseph J. Herkness, executive director.
The $2.82 billion fund aims to keep 11.18% of total assets in intermediate and long-term domestic bonds but had 10.4% before the termination, made for performance reasons. Remaining domestic bond managers are Nicholas-Applegate, Miller Anderson & Sherrerd, Smith Graham and Western Asset Management.
Lynn Mander, a senior vice president at Corbin, declined to discuss the reason for the termination.
Convergent buys majority interest in manager
CHICAGO - Convergent Capital Management, Chicago, purchased a majority interest in Bufka & Rodgers, an investment counseling firm with $1 billion in assets, said H. Tom Griffith, Convergent president. Bufka & Rodgers, Schaumburg, Ill., manages both high-net-worth and tax-exempt assets. Convergent, an investment management umbrella firm now with $1.5 billion under management, used a combination of cash and notes for the purchase. Terms were not disclosed.
CIGNA adds 14 options to multimanager program
HARTFORD, Conn. - CIGNA added 14 investment options to its defined benefit multimanager investment matrix. The new options are institutional separate accounts and bring to 44 the number of options available in the matrix.
New fixed-income options are a government/corporate bond index fund and intermediate bond index fund managed by State Street Global Advisors, and a CIGNA Multi-Sector Bond Index Fund and Global Fixed Income Fund, both managed by CIGNA. New equity funds are Lazard Freres Equity Fund; a core growth equity fund from Putnam; a Russell 3000 index fund and an EAFE index fund from State Street Global; a quantitative small-cap fund from INVESCO; an actively managed small-cap fund managed from Fiduciary Trust International; and an enhanced international equity fund managed by CIGNA.
CIGNA also initiated three balanced asset allocation funds consisting of multimanagers with equity exposure from 60% to 70%.
Companies studying fund consolidation
INDEPENDENCE, Ohio - Centerior Energy Corp., Independence, and Ohio Edison Co., Akron, are studying how to consolidate their defined benefit, 401(k) and nuclear decommissioning funds after the companies merge, said Gregory Tropf, Centerior senior investment analyst.
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 people studying the consolidation; they will consider in the next few months whether to use an investment consultant. Centerior uses Summit Strategies; Ohio Edison uses Ennis Knupp.
The merger of the companies isn't expected until year-end.
Norwest consolidates trust service units
MINNEAPOLIS - Three Norwest Corp. business units that provide trust services to institutional investors have been combined into a new unit. The new master trust and custody services division will oversee master trust assets totaling $100 billion. The corporate custody, financial institutions custody and master trust divisions were combined under Steven Greenstein, vice president. Mr. Greenstein formerly managed the master trust division.
