Legislation is expected to be introduced Wednesday to ease the equity allocation limit on the $19 billion Alaska Permanent Fund, Juneau. The proposal, being introduced by the joint Legislative Budget and Audit Committee, would allow the fund to invest up to 60% of assets in equities, up from 50% now. The current allocation is 48%, although it often fluctuates to 50%.
``I don't know if we would change the allocation to 60%,'' said Jim Kelly, director-communications. ``We just want the capability.''
Jerry Burnette, committee aide, said the bill would be sent to the Senate first and probably referred to the State Affairs Committee or Finance Committee. The Legislature is scheduled to be in session until mid-May.
PaineWebber Group reportedly is one suitor bidding for Trust Co. of the West. TCW Employees also have approached management about putting together a bid.
According to observers familiar with the firm, the bidding is almost over and a deal is expected this month. United Asset Management also had been mentioned as a potential suitor for TCW, which has been in play since late last year. A spokesman for TCW, with $53.3 billion in assets, would not comment; representatives for PaineWebber could not be reached.
Oakland (Calif.) Municipal Employees' Retirement System and the Oakland Police & Fire Retirement System, with $800 million in combined assets, directed their joint consultant, Wyatt, to conduct asset allocation reviews of each plan. Walter L. Johnson, director-retirement systems, did not give a time frame for completion of the reviews but said the systems are likely to make manager changes based on the studies this year.
Trustees of the Worcester County Retirement System, Worcester, Mass., voted to proceed with hiring Keystone Investments to run an $8 million domestic small-cap portfolio, said Michael M. Donaghue, chairman. The fund, with $195 million in assets, chose Keystone in June but re-evaluated its decision following the defection of Keystone personnel to Loomis Sayles.
Assets will come from cash and maturing GICs, Mr. Donaghue said. Segal Advisors assisted.
The MSCI EAFE index gained 1.5% in dollar terms in February, slightly edging out the MSCI World index, which rose 1%, but lagging the MSCI Emerging Markets Free index return of 4.2%.
Among emerging markets, Russia led the pack with an 18.1% jump, following January's 38.1% leap. Colombia's market advanced 10.6% to earn second place; Brazil increased 10.2%. The laggard among emerging markets was Thailand, with -8.5%.
In developed markets, top performers were Malaysia, up 4.3%; Germany, 4%; and the Netherlands, up 3.9%. Italy was the worst performer with -10.7%.
Coopers & Lybrand was named as independent auditor for the $111.5 billion California Public Employees' Retirement System by the fund's finance committee. Coopers & Lybrand was named to a five-year term and replaces Deloitte & Touche.
Munder Capital Management launched a global health-care mutual fund, the Munder Framlington Healthcare Fund.
The fund will mirror investments of a health-care unit trust managed by Munder's British affiliate, the Framlington Group. Both funds invest in about 150 health-care stocks in a dozen countries.
David Shulman, Salomon Brothers' chief economist, is warning that a 10% stock market correction is coming soon. In his latest research report, Mr. Shulman warns inflation is about to pick up and the market's record high valuations make it vulnerable to changes in the inflation outlook or even a small rise in interest rates. He did not alter his recommended allocation of 45% stocks, 35% bonds and 20% cash for balanced portfolios and 85% stocks and 15% cash for aggressive equity portfolios.
Office & Professional Employees, Local 153, New York, hired Glickenhaus & Co. to manage $15 million in large-cap value equity. Glickenhaus replaces Wertheim Schroder Investment Services, which was terminated in September. The fund may place more money with the new manager depending on performance, said George Bueno, director of the $195 million fund. Callan assisted.
Yvonne Cliff and Alexa Willson formed a merchant bank and hope to raise $250 million from pension fund and other institutional investors for a private equity buy-out fund. Their new firm, Juno Partners, is searching for a placement agent that will help raise money for their new fund. Ms. Willson preferred not to name the agents Juno is considering but said they are both major and emerging firms. She expects a selection in April.
Ms. Cliff had been head of private equity at Chase Securities and a general partner at Joseph Littlejohn & Levy. Ms. Willson is managing director of Mille Capital