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 U.S.
equities, produced $59 million in excess returns above passive
benchmarks from 1991 through 1996. Mainstream domestic equity
managers, which control 63% of externally managed U.S. equities
produced $40 million from 1990 through 1996.
The SEC reversed its position on employment-related proxy issues, ruling companies cannot omit investor requests on child labor, sweat shops and other forced labor from proxies. The SEC informed Dillard Department Stores it cannot exclude a shareholder proposal asking the company to
prepare a report on how it avoids foreign suppliers that exploit workers. The agency also informed Phillips-Van Heusen it cannot omit an investor request asking the company to reward top executives for implementing a policy to avoid overseas suppliers that use forced labor.
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 all ocation to two other bond portfolios and retained incumbent Northern Trust as master and global trustee.
BlackRock will receive $100 million for the enhanced portfolio and $75 million for an existing mortgage portfolio, raising tha t 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 pl an 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 sta te employees hired after March 31. SSgA will provide bundled services for the three plans and a three-tiered program. The first tier is composed of five SSgA index funds. The second tier is 12 equity funds, including two SSgA funds . The third tier is a mutual fund window.
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, 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.
Amalgamated Lithographers, Local 1, New York, hired J&W Seligman for a $30 million balanced portfolio. Seligman replaces Bear Stearns, which was terminated by trustees, said Harold Sa lvick, fund administrator for the $200 million pension fund. He would not discuss circumstances of the termination. SEI 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.
Plumbers & Pipefitters Surety Fund Local 9, Englishtown, N.J., hired Putnam Investments and Oppenheimer as the first equity ma nagers for the $80 million defined contribution plan. 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 inv estments. 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 wil l 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 Associa tes assisted