CalPERS trustees today are considering an end to separate classifications for active domestic equity managers.
And it is expected the new RFP going out for active external U.S. equity managers this spring will seek firms with an aggressive investment approach similar to that of the system's small and emerging managers.
A report shows the Sacramento-based system has been getting much better performance from small and emerging firms than from its mainstream managers. The report said the $111 billion system's small and emerging managers, which control 37% of the fund's external domestic equities, produced $59 million in excess returns above passive benchmarks from 1991 through 1996. Mainstream domestic equity managers, which control 63% of externally managed domestic equities, produced $40 million from 1990 through 1996.
Advent International raised $625 million for its Global Private Equity III fund. The fund is expected to be invested 45% to 55% in later stage businesses in Western Europe, 30% to 35% in North America and 15% to 20% in Asia. Institutional investors include Pensioenfonds PGGM, Zeist, and the IBM Retirement Fund, Armonk, N.Y.
SEARCHES & HIRINGS
Frontier Corp., Rochester, N.Y., hired a global fixed-income manager and committed to three new alternative investments for its $500 million defined benefit plan. Delaware Advisors will manage $40 million in global bonds. Private equity managers Heritage and Cornerstone Equity Partners will handle $5 million each, and RRI will run $5 million in a world timberland fund.
Fund officials also gave existing manager J.P. Morgan $15 million for core fixed income, raising Morgan's total fixed-income mandate to between $60 million and $65 million, said Joseph Enis, director of finance.
Assets came from a restructuring, which increased allocations to bonds by 11 percentage points, raised alternative investments by two percentage points and decreased domestic equity by 13 percentage points. The new asset mix is 44% U.S. equity, 22% international equity, 25% fixed income, 7% alternative investments and 2% cash. RogersCasey assisted.
The State Universities Retirement System of Illinois, Champaign, hired BlackRock Financial for an enhanced fixed-income index portfolio, said John R. Krimmel, associate investment officer. The $7.5 billion system also increased the allocation to two other bond portfolios and retained incumbent Northern Trust as master and global trustee.
BlackRock receives $100 million for the enhanced portfolio and $75 million for an existing mortgage portfolio, raising that assignment to $250 million. The system also added $80 million to an existing active core fixed-income portfolio run by Standish Ayer & Wood, raising it to $140 million.
The Michigan Treasurer's Office named State Street Global plan administrator and investment manager for the state's new defined contribution plan and its existing $700 million 401(k) and $2 billion 457 plans.
The new defined contribution plan, approved by the state last year, will cover state employees hired after March 31. SSgA will provide bundled services for the three plans and a three-tiered investment program. The first tier is composed of five SSgA index funds, a money market fund, a stable value fund and three asset allocation funds. The second tier is 12 equity mutual funds, including two SSgA funds. The third tier is a mutual fund window option.
Amalgamated Lithographers, Local 1, New York, hired J&W Seligman to handle a $30 million balanced portfolio. Seligman replaces Bear Stearns, which was terminated, said Harold Salvick, fund administrator for the $200 million pension fund. He would not discuss circumstances of the termination. SEI Capital Resources assisted.
Memorial Hospital of South Bend, Ind., hired Putnam as international equity manager for its $133 million operating fund. Putnam will receive $6 million, said CFO Jeffrey P. Costello. Watson Wyatt assisted.
Each firm will run $5 million in commingled funds. Putnam will invest in core growth equity and Oppenheimer in core value equity. Previously, the fund had only fixed-income investments, said Glenn Schaffer, administrator. Quantel Associates assisted.
Rhode Island Interlocal Risk Management Trust, East Providence, hired Loomis, Sayles and PIMCO as additional fixed-income managers.
Loomis will handle $10 million in fixed income and PIMCO will manage $5 million in its Moderate Duration Fund for the $25 million trust fund. Fleet Investment Advisors, which had managed the entire portfolio, will continue to manage the remaining $10 million in fixed income. Higgins Associates assisted